Lower Gas Taxes Coming to South San Francisco: Calif. Approves New Excise Tax Rate

By Renee Schiavone:

Californians will soon be paying less at the pump– at least when it comes to taxes. That’s because the California State Board of Equalization voted this week to lower the excise tax by 6 cents.

The new rate, $0.30, will go into effect on July 1, and be in effect for a year. The state reexamines the rate annually, and makes adjustments bases on projected fuel costs and consumption.

Earlier this month, state officials proposed the cuts, but they recommended a 7.5 cent cut.

“This gas tax cut, although less than originally proposed, is still good news for overtaxed Californians, who currently pay both higher gas prices and higher taxes than residents of other states,” said said BOE Vice Chair George Runner.

Still, Runner pointed out, taxes in the Golden State continue to impact drivers more than elsewhere.

“But even after this tax cut takes effect July 1, Californians will continue to pay more gas taxes and fees than residents in nearly every other state,” he said. “In fact, the Board’s cut won’t even fully offset the cost of a new ‘hidden gas tax’ that took effect January 1 to help fund high speed rail and other so-called anti-global warming efforts.”

There are two types of taxes that California drivers currently pay: sales tax and the per-gallon excise tax.

“The excise tax on gasoline pays for public road improvements and mass transit,” BOE officials said in a news release. “In FY 2013-14, the BOE collected nearly $5.8 billion for the Motor Vehicle Fuel Account, Transportation Tax Fund. The sales tax on gasoline primarily funds local government programs.”

(Image via Shutterstock)