Connecticut currently has the highest price on the sale of gasoline in the Northeast, an unfortunate distinction for the Nutmeg State. But the blame for the all the pain at the pump is not because of fluctuations in the market, or tensions in the Middle East. Connecticut has the highest price in gas simply because of the combined state and federal taxes on it.
This state imposes two taxes on gasoline, a state excise tax and a tax called the gross receipts tax.
The state’s excise tax holds at a steady rate of $0.25 per gallon. While that price seems high, overall the tax actually stays relatively even with the surrounding states.
What hurts Connecticut drivers and families the most is the state’s hidden gross receipts tax — a 7.53 percent rate on the gross earnings of the first sale of specific petroleum products within Connecticut.
Connecticut’s Gross Receipts Tax is collected at the wholesale level. The gasoline retailers who purchase the fuel from wholesalers pass the cost of the gross receipts tax they pay onto customers.
While the excise tax stays at a flat 25 cents per gallon, the amount collected from the gross receipts tax grows exponentially, almost doubling the amount you pay at the pump.
In simpler terms, as the price of gasoline increases, so does the tax.
As of the end of January, Connecticut taxpayers were paying around $3.68 per gallon according to AAA. The price includes the state’s 25 cents per gallon gas tax and another estimated 22 cents per gallon with the gross receipts tax.
Along with all of the dreadful rumors circulating about the cost of gas getting ready to skyrocket, the gross receipts tax rate is also currently scheduled to increase from 7.53 percent to 8.1 percent in 2013, adding insult to injury.
The more gas prices rise the further away any hope of economic recovery in Connecticut becomes. There can be no arguing against this.
In the end, higher gas prices mean less fuel in your tank and less cash in your wallet. And while you suffer at the pump, Connecticut brings in more revenue.
After a long, unsuccessful fight to end the tax all together, legislators such as myself have fought diligently to do what they can towards capping the gross receipts tax in effort to help businesses and families who can use the extra savings.
Unfortunately our appeal has fallen on deaf ears, and the legislative leadership has refused to bring the issue up.
How can we expect to bring in any type of economic recovery when the price of gas will keep hitting our citizens harder and harder?
Len Greene Jr. is a Republican state representative who represents the towns of Ansonia, Beacon Falls, and Seymour.