The much discussed gas tax hike in Georgia will raise prices at Newton County's pumps by 5 cents when it takes effect Sunday.
The cost for a gallon of regular gasoline in Newton County ranges from $3.72 to $3.79. Click here for a check on local gas prices.
Most goods in Georgia are subject to sales tax, including gasoline, but the confusion comes in the fact that gas is not taxed at the simple 7 percent rate as is everything else in Newton and other counties.
First, the state charges an "excise sales" tax, which is permanently set at 7.5 cents per gallon. Then it charges its regular sales tax, which works out to be close to 7 percent but changes at least twice a year based on a gas price index, said Beth Brown, communications director for Association County Commissioners of Georgia.
The problem for consumers is that when the gas price rises significantly - more than 25 percent -the gas sales tax also rises automatically under state law.
The current state gas tax is 10.1 cents per gallon and the local rate is 7.6 centers per gallon. Beginning May 1, the state rate is going to increase by 2.8 cents and the local rate is going to jump by 2.1 cents. Diesel is experiencing similar hikes.
The price of gas in Georgia is averaging $3.76 a gallon, according to the AAA Daily Fuel Gauge Report, a significant increase from the $2.77 per-gallon price average a year ago.
The increase is proportionally greater for the state, which normally collects 4 percent of all sales tax, while Newton and other counties can only collect a maximum of 3 percent for local sales tax and government and education SPLOSTs. The two SPLOSTs must be used for dedicated local projects approved by voters, so the gas tax revenue is not necessarily dedicated to transportation, or any other specific, projects.
The reason that the gas tax increases when the price of gas increases, is because when a normal good increases in price, the percentage sales tax accounts for that. An item that costs $10 more would bring 70 additional cents to the government.
However, a set per-gallon rate would not collect any additional money for the state. If 100 gallons were sold, the state and local sales tax would be $17 regardless if the prices per gallon were $3.50 or $4. That's why the rate is set to change biannually or when a large price increase occurs.
The federal gas taxes stand at 18.4 cents a gallon, and the majority of this money is used for transportation projects.
According to the Associated Press, the gas tax issue has long frustrated Georgia motorists, and lawmakers this year considered making changes to the gas tax rules but adjourned without taking action. Gov. Nathan Deal has also said he is unlikely to put a freeze on the tax hike because it's not related to a state of emergency.