Georgia extends gas tax relief, but policy debate continues

Motorists take advantage of a July 2024 promotion sponsored by Americans for Prosperity-Georgia. As part of the promotion, the group lowered gas prices at a Chevron in Dunwoody temporarily to $2.389 per gallon of regular unleaded gas, which the group said was the national average price per gallon in January 2021. (Photo by Todd DeFeo/The DeFeo Groupe)

Republican Georgia Gov. Brian Kemp is extending the state’s motor fuel tax suspension for two more weeks, continuing relief at the pump through June 3 as Memorial Day travel approaches.

Kemp signed an executive order declaring a state of emergency and suspending Georgia’s gas tax beginning at 12:01 a.m. on May 20. The order follows a separate suspension under House Bill 1199, which expires at 11:59 p.m. May 19. That earlier suspension halted collection of Georgia’s motor fuel excise tax from March 20 through May 19.

“As Georgia families prepare for the Memorial Day travel weekend, they should not feel blindsided by prices at the gas pump,” Kemp said.

Georgia’s motor fuel tax is 33.3 cents per gallon for gasoline and 37.3 cents per gallon for diesel. The National Federation of Independent Business praised the extension, saying fuel costs affect nearly every part of the supply chain, from production to delivery.

“This is a big relief for Georgia’s small business community,” NFIB State Director Hunter Loggins said in a release. “Fuel costs affect nearly every part of the supply chain, from production to delivery. While gas prices are below the record highs of 2022, they have risen sharply these past few weeks, driving up costs across the board.”

The move comes as lawmakers elsewhere are pushing for similar relief. In New Jersey, Republican Sens. Carmen Amato Jr. and Anthony M. Bucco renewed calls for legislation they said would provide permanent relief at the pump as gas prices rise above $4.50 per gallon.

Amato said New Jersey families are being squeezed by rising costs, while Bucco said the state needs a “smart, responsible approach” that helps taxpayers while preserving transportation funding.

Not everyone views gas tax holidays as sound policy. The Tax Foundation has argued that suspending fuel taxes offers political appeal but does little to address the underlying causes of high gas prices. The group noted that the federal gas tax has remained 18.4 cents per gallon since 1993 and remains a key funding source for highway construction.

The group also has warned that consumers may not receive the full benefit of gas tax holidays, citing evidence from state-level suspensions in 2022 that producers captured part of the savings through higher pre-tax prices.

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