Tax Rate on Gasoline Drops in Time for 4th of July Weekend

Tax Rate on Gasoline Drops in Time for 4^th of July Weekend

Sacramento – The California State Board of Equalization (BOE) announces the state excise tax on gasoline will drop by six cents per gallon on July 1, 2015. This will lower the excise tax rate from 36 cents to 30 cents per gallon.

The Board approved the six cent tax rate reduction at its February 2015 meeting. The 30 cent per gallon rate will remain in effect until June 30, 2016.

While Californians will pay less in state excise tax on gasoline starting July 1^st, this may not necessarily translate to lower overall prices at the pump. Other factors, such as world crude oil prices and supply and demand, also affect gasoline prices.

“These annually changing rates can be confusing for California drivers,” said BOE Chairman Jerome E. Horton. “I look forward to a productive special legislative session where hopefully a more stable funding source for transportation projects can be identified and greater clarity provided to taxpayers at the pump.”

The BOE is tasked with annually adjusting the state excise tax rate on gasoline by March 1^st of each year, after passage of 2010 laws known as the “fuel tax swap.” The new laws lowered the statewide sales tax rate on gasoline to 2.25 percent and raised the excise tax rate so that the total amount of tax revenue generated is equal to what would have been generated had the sales and use tax and excise rates remained unchanged. The excise tax rate for the coming fiscal year is based on estimates of the projected average price of gasoline and number of gallons to be purchased. The difference between the projected and actual revenue collected from the prior fiscal year is then subtracted from the coming year projection to arrive at the upcoming rate.

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Re-elected in 2014, Chairman Jerome E. Horton is the Third District Member of the California State Board of Equalization, representing more than 9.5 million residents in Los Angeles County. He is also the Board of Equalization’s Property Tax Committee Chairman. He is the first to serve on the Board of Equalization with over 21 years of experience at the BOE. Horton previously served as a Member of the California State Assembly from 2000-2006.

The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects $60 billion annually in taxes and fees, supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes.  For more information on other taxes and fees in California, visit www.taxes.ca.gov.