USATODAY.com -- Just when prices at the pump were headed down, a new gas tax will bring prices up.
Consumer investigator Jim Strickland has confirmed the gas tax will go up for the second time in two months. The state refigures the gas tax twice a year -- in January, July and whenever prices go through a dramatic swing up or down.
By law, the 4 percent sales tax gets figured on a periodic snap shot of average gas prices. Unfortunately for drivers, the taxman figured the average weeks ago, when pump prices were still in the $4 range, so the tax is going up even though current prices are down.
Two years ago, the gas tax was only 8 cents a gallon, but the tax has since ballooned. Next month’s new rate represents a 45 percent increase in the past year, an 80 percent increase since the summer of 2009.
According to the law, gas stations and their suppliers have to get plenty of notice when the tax changes. That's why the department of revenue looks at prices so early when figuring the new rate.
It works in reverse too. When the prices come down during the snap shot period, the tax goes down.
Posted By: Siebra Muhammad
Monday, June 6th 2011 at 11:58AM
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