ATLANTA — With the state a step closer to suspending the gas tax we pay at the pump, few if any drivers in Georgia are aware of how the state determines how much tax we pay per gallon.
A Senate Finance Committee has passed a bill that would suspend Georgia’s gas tax through the end of May. The full Senate will take up the matter next. If approved, the bill would go to Gov. Brian Kemp for his signature.
“I don’t know, two dollars?” one customer at a Dunwoody QT guessed when asked how much she thought she paid in taxes.
The current state gas tax in Georgia is 29.1-cents per gallon. That’s slightly more than the U.S. average of 26-cents a gallon.
“My thought process I don’t really think about the tax and who’s doing what with it,” another customer said.
According to the U.S. Energy Information Administration, more than half of what we pay at the pump is for the crude oil that’s refined into gasoline. Some of what we pay goes toward the refining process, while some pays for the marketing and distribution of gas.
Then there are taxes. Here’s how Georgia determines how much to charge.
According to the Governor’s Office, the state uses a formula that’s based on the average miles per gallon of registered vehicles in Georgia. The state then adjusts the tax each year, considering changes in the fuel efficiency of vehicles on the road and the Consumer Price Index.
“It sounds like what Georgia is trying to do is to say, we want to keep the tax in line with inflation so that the real value of the tax remains constant,” said Dr. Ray Hill, Senior Lecturer of Finance at Emory University’s Goizueta Business School.
Keep in mind, you’re also paying 18.3-cents per gallon in federal taxes.
Alaska has the lowest gas tax in the country at 8-cents a gallon.
Pennsylvania has the highest tax at 57.6 cents a gallon.