BOE Member George Runner
The California State Board of Equalization (BOE) today voted unanimously to adjust the Fiscal Year 2014-15 excise tax rate on gasoline downward by $0.035 during its monthly Board Meeting in Culver City.
State law mandates that the Board set the excise tax rates for gasoline before March 1 of each year. This newly adopted excise tax rate of $0.36 will take effect on July 1, 2014, and remain at that rate until June 30, 2015. Motorists currently pay $0.395 in excise tax for each gallon of gasoline they purchase.
Laws enacted in 2010 known as the “fuel tax swap” require revenue neutrality, meaning motorists pay no more or less state tax on gasoline purchases than they would have prior to the swap. The new laws lowered the sales tax on gasoline to 2.25 percent and raised the excise tax by an amount projected to equal the sales tax that otherwise would have been collected under the old tax structure.
Every year, the BOE sets the rate based on the projected price and number of gallons drivers will purchase in the upcoming fiscal year. The upcoming annual rate also accounts for the difference in the actual and estimated sales tax revenue in the prior fiscal year that would have been collected under the prior system.
Price and purchase forecasts are based on projections from the Department of Finance and IHS Global Insight, an internationally recognized firm that provides comprehensive economic and financial data to nations and states.
Board Member George Runner, who represents the Santa Clarita Valley, made the following statement:
“Our vote today is good news for California taxpayers. This much-needed tax relief will arrive as Californians are on the road for summer vacations.
“Lower gas taxes are good for our economy and good for jobs, but even with this cut Californians will continue to pay one of the highest gas taxes in the nation.
“Unfortunately, some in the Legislature want you to pay more taxes, rather than less. Just last week a leading lawmaker proposed raising your gas tax by up to 43 cents per gallon.
“Rather than plotting to raise taxes at a time when the state is already awash in cash, lawmakers should be finding ways to simplify our tax laws and make life easier for California taxpayers.
“Lawmakers could start by scrapping the confusing and complicated gas tax formula they enacted in 2010 and replacing it with one that is simple, straightforward and easy to understand.”
Elected in November 2010, George Runner represents more than nine million Californians as a member of the State Board of Equalization. For more information, visit www.boe.ca.gov/Runner.