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Posted: January 3, 2009 4:54 p.m.

State sees drop in gas sales tax

The Georgia Department of Revenue is giving motorists a present at the start of the new year – a drop in motor fuel taxes.

The state sales tax on gasoline will drop from 11 cents per gallon to 7.1 cents per gallon on Thursday.

Under Georgia law, the revenue department sets the sales tax for gasoline, diesel fuel, aviation fuel and liquefied propane gas on Jan. 1 and July 1 each year. This year, Gov. Sonny Perdue issued an executive order in June freezing the sales tax at the January 2008 level.

This prevented a tax-related increase when prices reached record highs in September and October.

Aziz Jiwani, manager of the BP gas station on Pace Street in Covington said he did not anticipate much of an increase in business due to the sales tax decrease.

"I don’t think it will affect it. It will be almost the same," Jiwani said, adding that gas prices are gradually trending upwards again.

Jiwani said with so many people in the area out of work, a few cents less on the price of gasoline will not make much of a change in their fuel consumption habits.

The new average price set by the Georgia Department of Revenue will be $1.77 per gallon for all blends of gasoline and $2.57 for diesel fuel.

The state will set the sales tax rates again on July 1, unless there is a 25 percent change in the sales price of any fuel at any time.

In addition, the state has a flat excise tax of 7.5 cents per gallon that is used to fund transportation projects in the state.

In November, the state sold less motor fuel than a year earlier.

The revenue department collected $38.39 million in motor fuel excise tax during November 2008 compared with $42.1 million in November 2007, a drop of 8.8 percent.

Rachel Oswald contributed to this report.

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