The California Board of Equalization (BOE) will consider lowering the excise tax rate for gasoline by 3.5 cents at an upcoming meeting, a move that's not guaranteed to lower prices at the pump.
At its Feb. 25 meeting, the BOE will consider dropping the excise tax to 36 cents per gallon from 39.5 cents per gallon. If approved, the reduction would go into effect between July 1 and June 30, 2015.
"This reduction in the excise tax of 0.035 will guarantee that the total taxes collected do not exceed the amount authorized by the legislature," said Jerome Horton, the board's chairman. "Historical data indicates that this legislation requiring the adjustment does not have an impact on overall gas prices. However, it would be nice if this decrease in excise tax would result in a corresponding decrease in gas prices."
State legislators passed the "fuel tax swap" law in 2010 that lowered the sales tax rate on gasoline by 5 percent. It also increased the excise tax rate per gallon of gasoline to assure that consumers would pay no more or no less in state gasoline taxes that they would have paid before the swap. The BOE must set the excise tax rate for gasoline by March 1 of each year.