How states aim to tackle high gas prices with tax holidays, rebates for residents

Experts say a break from those taxes won’t necessarily result in big savings.

“It does take money out of state coffers that could be used for something else,” such as paying for state unemployment benefits, said Scott Roberti, who leads Ernst & Young’s state policy services practice.

Several states have already put gas tax holidays in place.

Connecticut Gov. Ned Lamont, a Democrat, signed emergency legislation on March 24 to suspend the state’s gas tax from April 1 through June 30. The state’s tax on gasoline is 25 cents per gallon.

In addition, the legislation also suspends fares on public buses statewide during that same period.

Georgia Republican Gov. Brian Kemp signed legislation on March 18 that will temporarily remove the state’s tax on gas through May 31.

The state typically applies levies of 29.1 cents per gallon on gas.

Maryland Republican Gov. Larry Hogan signed legislation on March 18 that suspends the state’s gas tax of 36.1 cents per gallon for 30 days.

“I think it makes a huge difference to the average consumer and I can tell you that the average price across the country is something like $4.25 — we’re down around $3.75 so we’re 50 cents a gallon cheaper than most,” Hogan said during an interview with CNBC’s “Squawk Box.”

Other states may follow the precedent set by Connecticut, Georgia and Maryland with their own gas tax holidays, and in some cases, direct rebate payments to residents.

Here’s a roundup of activity that has taken place in recent weeks.

A proposal has been raised by certain state representatives to suspend the state’s gas tax from May 1 through Sept. 1, or until the average monthly prices per gallon are at or below what the monthly price was in January.

Democratic Gov. Gavin Newsom has unveiled a proposal to send drivers $400 debit card rebates. The payments would be determined by vehicle registration, not tax records. Individuals could receive up to two payments, which would start in July if approved by the state legislature.

Separately, a bill introduced in January would suspend the tax on motor vehicle fuels for six months.

Colorado Democratic Gov. Jared Polis has sought to delay a new 2 cents per gallon fee on gas. In addition, he sent a letter with five other governors urging Washington lawmakers to suspend the federal gas tax of 18.4 cents per gallon.

Lawmakers are seeking to send $300 checks to all state residents who filed 2020 tax returns. However, the legislation still needs to be formally proposed and passed.

Lawmakers have agreed to suspend the state’s gas tax for one month in October. Florida’s gas tax is about 27 cents per gallon.

Efforts to temporarily suspend the state’s gas tax of 30 cents per gallon through the rest of the year have stalled. However, Democratic Gov. Janet Mills has proposed sending $850 checks to state residents amid high gas prices and inflation.

While the Republican-led state legislature passed a bill to suspend Michigan’s gas tax of 27.2 cents per gallon for six months, Democratic Gov. Gretchen Whitmer has said she would veto the proposal. Whitmer is among the governors who have petitioned federal lawmakers to suspend the national gas tax.

State lawmakers have called for pausing the state’s gas tax of 28.5 cents per gallon from Memorial Day to Labor Day.

Mississippi Lieutenant Gov. Delbert Hosemann and other state lawmakers have proposed suspending the state’s gas tax of 18.4 cents per gallon for six months.

New Hampshire Gov. Chris Sununu has said he is on board with the idea of giving drivers a temporary reprieve from the state’s taxes on gas at the pump.

Gov. Phil Murphy has proposed tax rebates of up to $700 for homeowners earning up to $250,000 per year in income and $250 for renters who earn up $100,000. Separately, legislation has been proposed to cut the state’s 42.4 cents per gallon gas tax in half if the average price of an unleaded gallon reaches $4.51 in summer months.

Certain New York state political leaders have backed suspending the state gas tax of about 33.3 cents per gallon of gas. Depending on the proposal, that could last through the end of the year or for one year.

One group of lawmakers is calling for a one-year suspension of the state’s 26 cents per gallon gas tax.

Certain state Democratic lawmakers have urged Tennessee Gov. Bill Lee to suspend the state’s gas taxes of 27.4 cents per gallon for 90 days.

Virginia Republican Gov. Glenn Youngkin has proposed suspending the state’s 26.2 cents per gallon tax on gas for three months, from May through June. Those levies would then be gradually phased back in from August through September.