Tax on gas drops 6 cents


By Jonathan Horn | 12:02 p.m. June 30, 2015

El Cajon, CA_2/9/2015_A gas station attendant changes the price on a grid of prices at a Quik Trip in El Cajon, CA during the recent rundown and accompanying runup of prices in 2015. John Gastaldo/U-T San Diego/Zuma Press

Californians hitting the road for a July 4 holiday can expect a bit of relief at the gas pump.

The state is lowering the per-gallon tax, called the excise tax, by 6 cents starting Wednesday to 30 cents per gallon.

Californians still also pay federal excise taxes and state and local sales taxes. In fact, drivers in the Golden State pay among the highest in the nation's gas taxes at about 66 cents per gallon, according to the American Petroleum Institute.

However, a driver that travels 15,000 miles per year at 20 miles per gallon saves $45 due to the gas tax cut.

Since 2010, the state Board of Equalization has been charged with adjusting the excise tax rate due to a complex system called the Fuel Tax Swap. The state legislature and then-Gov.

Arnold Schwarzenegger made the move during the economic downturn to shift some revenues from gas taxes to future appropriations. In doing so, the state lowered the sales tax rate and raised the excise tax.

The state under the new system was required to collect the same amount of money as it would have under the previous system. That's why the board adjusts the excise tax rate each year. The board votes on the new rate each February to take affect July 1, the start of the new fiscal year. Originally, board staff proposed cutting the tax 7.5 cents, but its members approved the 6 cent cut instead.

Some board members have called for the topsy turvy system to be eliminated. In 2012, the tax rose by 3.5 cents per gallon to 39 cents, only to be reversed the following year back to 36 cents. On Wednesday, it goes down to 30 cents.

The reduction comes as gas prices overall have declined.

Currently, the average price for a gallon of gas in San Diego County is $3.51, down 65 cents from the same time last year, the Auto Club reports.

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