Maryland and Georgia announce gas tax exemptions as federal efforts stagnate in Congress

States are taking the lead in suspending gasoline taxes to help lower prices at the pump as legislation for a federal fuel tax holiday hits roadblocks on Capitol Hill.

Governor Larry Hogan on Friday signed a bipartisan bill making Maryland the first state in the nation to suspend its gasoline tax amid the recent price spike. The month-long law takes effect immediately and temporarily removes Maryland’s 36.1 cents per gallon tax on gasoline and its 36.85 cents per gallon tax on diesel.

“As we continue to stand in solidarity against Russian aggression in Ukraine and as Marylanders grapple with the impact of soaring inflation with the rapidly rising average price of gas, this bipartisan action will provide some relief. pain at the pump,” the Republican governor said. at a bill signing ceremony. “This will of course not be a panacea,” he added, warning that market forces would likely cause prices to fluctuate.

Later Friday, Georgia Governor Brian Kemp, who is seeking re-election this year, signed legislation that would eliminate the roughly 29-cent fuel tax and 32.6-cent diesel tax until May 31st.

“While we can’t fix everything Washington has broken, we are doing our part to lessen the impact on Georgians’ wallets,” Kemp said. said in a press release.

More than a dozen states are looking to follow in the footsteps of Maryland and Georgia.

The National Conference of State Legislatures, an organization that tracks public policy issues, said at least 17 state legislatures are considering reducing or freezing gasoline taxes, from California and New York to the US. ‘Idaho and Missouri.

Tax exemptions would free distributors, who set prices at the pump, from paying the tax and give more leeway to reduce prices for consumers.

The state-level proposals come as Congress works to push forward legislation that would suspend the federal fuel tax. A group of six Democratic governors last week sent a letter to congressional leaders calling on them to suspend the federal fuel tax to lower gas prices.

“At a time when people are being directly affected by the rising prices of everyday consumer goods, a federal gasoline tax exemption is a tool in the toolbox to reduce costs for Americans, and we urge full attention to this bill,” they wrote.

The Democratic bill would suspend the federal fuel tax of 18.3 cents per gallon on unleaded gasoline through 2022. The measure is sponsored by Sens. Mark Kelly, D-Arizona, and Maggie Hassan, DN.H., both of whom are up for re-election this year.

In a floor speech last month, Senate Minority Leader Mitch McConnell, R-Ky., accused Democrats of trying to “blow a $20 billion hole in highway funding.” with their gas tax proposal.

Adding to concerns about its impact on the Highway Trust Fund, the bill has failed to convince Senate Democrats who are unconvinced that big oil companies will cut prices for consumers if there is a pause in the federal gas tax.

With no guaranteed relief in sight from Washington, states like Idaho, Illinois and Indiana are considering suspending their gasoline taxes for up to two years, according to the National Conference of State Legislatures. Others, however, envision periods closer to what Georgia and Maryland have adopted.

Gov. Glenn Youngkin said this week he would send a bill to the Virginia General Assembly to suspend the state’s gasoline tax for three months after the Legislature blocked his earlier efforts to suspend a recent gas tax increase of 5 cents per gallon for 12 months. .

Based on Youngkin’s reduced proposal, Virginia would suspend the motor vehicle fuel tax — 26.2 cents per gallon for gasoline and 27 cents for diesel — for three months beginning in May, and reintroduce the tax gradually in August and September.

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