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9/7/2005
States Consider Suspending Gas Taxes
Several states have suspended, or are about to suspend, taxes on gasoline.

Gas prices
With consumers hit hard by record gasoline prices, lawmakers in several states are moving to provide temporary relief by suspending fuel taxes.

"The average state levies a 21.4 cent tax on each gallon of gasoline," said Earl Ehrhart, national chairman of the American Legislative Exchange Council. "Temporarily repealing these taxes will ease the impact of skyrocketing prices that will inevitably occur due to the break in the supply chain."

In Georgia, Governor Sonny Perdue (R) suspended the 7.5 cent gas tax Friday with an executive order. The governor also called a special legislative session to consider additional relief, and the House Ways and Means Committee quickly responded with unanimous approval of a proposal to suspend both the gas tax and 4 percent sales tax on gasoline through September 30.

States like Georgia and Michigan that levy a percentage sales taxes on a gas bill in addition to a per-gallon tax have been reaping a significant windfall as a result of the skyrocketing prices. Michigan's state House voted to allow the governor to suspend the state's 6 percent sales tax on gasoline with an executive order, but a spokesman for the governor has said the state can't afford to reduce the tax burden on gas.

Washington state voters already are set to vote in November to repeal a 9.5 cent hike in the gas tax that the legislature recently approved.

In other states, the debate is just beginning.

The New York State Conservative Party circulated a petition last month to suspend the 4 percent sales tax on gas. Likewise, Republican leaders of the Maine legislature called for a special session to pass a sixty-day suspension of the 25.9 cent gas. Republican legislators in Tennessee are trying to persuade the governor to drop the 12.5 cent tax. Pennsylvania lawmakers will also tackle the state's 30 cent tax. Massachusetts legislators are actively debating a suspension of the 21 cent gas tax.

Senate Democrats in Florida are calling on the Governor Jeb Bush (R) to suspend the 21 cent tax, and Bush has said he would support an agreement to cut the gas tax, while Arizona Governor Janet Napolitano (D) has rejected calls to suspend the 18 cent gas tax.

Political candidates have latched onto the issue. A South Dakota lawmaker running against the Republican governor is asking for a 45-day suspension of the 22 cent gas tax. Likewise, a Republican candidate for governor in Nevada is looking for a 60-day suspension of the 17.65 cent tax.



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