Today the Connecticut General Assembly passed an emergency certified bill that will cap the gross receipts tax on gasoline. The cap will go into effect when the wholesale price of gas reaches $3 per gallon. With the wholesale cost of gasoline over $3.20 and rising, it is a move that will ease some of the pain at the pump.
“Today Connecticut citizens scored a small victory and received some well deserved and badly needed tax relief,” State Representative Penny Bacchiochi (R- Somers) said. “Gas taxes continue to rise and show no signs of slowing down; so as the price per gallon increases, the money saved as a result of the cap will continue to increase as well.”
However, Bacchiochi was quick to point out that gas prices in Connecticut will remain higher than most states despite the cap. In addition to the 18.4 cents per gallon in federal taxes charged in all states, Connecticut charges a state excise tax of 25 cents per gallon and the gross receipts tax which, at 7.53% of the wholesale cost of gasoline, is currently close to an additional 25 cents per gallon That means 50 cents per gallon goes to the State of Connecticut- far more than 23.5 cents per gallon in Massachusetts or 33 cents per gallon in Rhode Island.
Originally the Democrats proposed making the gas tax cap temporary, due to expire on June 30, 2013, just a day before the gross receipts tax is scheduled to increase from 7.53% to 8.81%. Hours before passing the bill the Democrats changed course and agreed to make the cap permanent.
“We still have some work to do if we are going to bring the cost of gasoline in Connecticut in line with the national average and other states in the northeast. Gas stations near the Massachusetts border lose a good deal of business because of the high cost at the pump and, unfortunately, today’s legislation is unlikely to have a huge effect on that. I hope my colleagues in the legislature will remain open to discussing additional gas tax changes in the coming months.”
Bacchiochi joined her Republican colleagues in offering an amendment that would also add a cap to the percentage charged by the gross receipts tax. That amendment failed 94-53, but Bacchiochi said she will not give up on gas tax relief and will continue to try to prevent the large increase scheduled for next year.