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.
“The sky high gas taxes in Connecticut are putting an undue burden on the budgets of working families and small businesses,” said State Representative Tim Ackert (R- Coventry). “Whether you are commuting to work, picking your kids up at school or driving around to job interviews- you are feeling the pain at the pump. Today’s bill will provide some relief but there is plenty we should be doing to further reduce gas taxes in this state.”
Ackert 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. However, when Republicans offered an amendment to cap the percentage as well, Democrats balked and voted it down 94-53.
“The cap at $3 is a good start- but in my opinion, it’s only that- a start,” said Ackert. “A cap on the percentage would prevent a huge gas tax increase next year, unfortunately, we couldn’t accomplish that today. Eventually, I hope, we can not only cap the percentage, but do away with the gross receipts tax and have just one gas tax that is easy to understand and transparent. That is something I will continue to work toward.”