The state Board of Equalization will consider adjusting the excise tax rate for gasoline downward by 3.5 cents during its Feb. 25 meeting in Culver City.
If approved under the guidelines of a complicated state formula setting gas taxes, the resulting decrease from 39.5 cents to to 36 cents will remain in place until June 30, 2015.
The excise tax adjustment is the byproduct of laws, signed by former Gov. Arnold Schwarzenegger in 2010, that created a new tax structure for gasoline and mandated that BOE adjust the state gas excise tax rate by March 1 of each year.
Historically, the swap has had little or no effect on at-the-pump gas prices. When gas prices go up, consumers pay a corresponding higher amount in sales tax. The statewide baseline sales tax on gas is 2.25 percent, and additional taxes vary by jurisdiction.
BOE is anticipating relatively low, stable gas prices over the next fiscal year, a primary reason behind the proposed excise tax reduction.
Gasoline sales tax revenue funds local government programs; the state excise tax on gasoline funds highway and mass transit projects throughout California.
Call The Bee’s Mark Glover, (916) 321-1184.