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Georgia Suspended Its Gas Tax. Here’s What It Means For You.

Governor signed legislation aimed at bringing relief to drivers facing surging fuel prices.

Gov. Brian Kemp recently signed into law a bill to suspend Georgia’s tax on gasoline. (AscentXmedia/Getty Images)

The next time you’re at the gas pump, you might feel less strain on your wallet.

On March 18, Gov. Brian Kemp signed into law a bill to suspend Georgia’s tax on gasoline. Also known as a gas tax holiday, HB 304 was designed to reduce the rising cost of fuel for state residents struggling to keep up. The surging price of gas has been fueled by the war between Ukraine and Russia, the world’s third-largest crude oil producer.

Here’s a breakdown on what the gas tax holiday is and why it may benefit Black folks more than others.

What exactly is the gas tax anyway?

Georgia’s motor fuel tax is the indirect financial charge the state’s Motor Fuel Tax Unit

imposes on gasoline sales. Before it was temporarily suspended, the tax added about 29 cents per gallon to the price of gas.

Does this mean I’m getting 29 cents off my next visit to the pump?

Gas station merchants in the three states that have enacted gas tax holidays this year have transferred those savings to their consumers, according to Patrick De Haan, head of petroleum analysis at GasBuddy, a Boston-based tech company whose apps and websites provide real-time fuel prices from roughly 140,000 petroleum stations in the U.S., Canada, and Australia.

“Basically the full decrease in taxes was passed along, I would say, about seven to 10 days after the legislation, maybe a couple days sooner,” De Haan said.

If they can lower the tax now, why don’t they just keep it low? 

The gas tax holiday may benefit Georgia residents in the short term, but it could cost the state as much as $400 million in uncollected revenue. That’s money that could be used for infrastructure projects and other endeavors.

How much of a decrease can drivers expect? 

The difference in price resulting from gas tax holidays isn’t major for most people, but De Haan says it matters more to lower-income Americans, a group that is disproportionately Black and, since last year, has felt the sting of inflation more than most, even with wages going up for many.

“Gasoline taxes are generally regressive in that they impact lower incomes much more than higher incomes,” De Haan said. “Higher gas taxes and higher prices disproportionately impact lower-income households.”

How do Georgia’s prices compare nationally? 

The average price for regular unleaded gas nationwide hit a record high of $4.331 per gallon on March 11, according to AAA data. Georgia’s average gas price reached a slightly lower, state record high of $4.293 per gallon the same day.

As of Monday, the state’s unleaded regular gas price leveled off to an average of $3.761 per gallon. That’s good enough to make Georgia the eighth-cheapest state in the nation for regular unleaded gasoline, according to AAA.

It’s also the second-lowest gas price among states in the Southeast. South Carolina has the lowest average gas price at $3.753 per gallon. Florida has the highest average price in the region at $4.072 per gallon.

Locally, can drivers expect lower rates across the state?

Not everyone in Georgia is feeling the same level of relief from the state’s gas tax holiday.

Counties with larger populations, and higher demand for gas as a result, tend to have higher gas prices than rural areas where demand for gas is typically lower.

In Fulton County, the average gas price per gallon was $3.95 per gallon on Monday, a bit higher than the statewide average of $3.761.

But residents in the central Georgia city of Barnesville, located in the largely rural Lamar County, were only paying about $3.52 per gallon the same day.

A major portion of Georgia’s 32.6% Black population resides in rural counties. 

Do other states have a gas tax holiday?

Georgia and Maryland were the first two states to enact gas tax holidays in response to the pricing increases, followed by Connecticut. “In both of those areas, and now in Connecticut, prices shortly thereafter plummeted,” De Haan said.

When does the gas tax holiday end? Will the prices go back up?

Unless it’s renewed, Georgia’s gas tax holiday is scheduled to expire on May 31. That’s likely to cause a “whiplash” effect on gas prices, according to De Haan, who expects pandemic-fatigued Americans to take more vacations this summer, which means they’ll be spending more on fuel.