Sunday, March 10, 2013

Good News For Delaware

Maryland Governor O'Malley is proposing a revised state gas tax structure.  Having blown the Transportation improvement fund on other things than transportation he is proposing the following
that would become effective July 1, 2013:
  • Reduce the state tax on gasoline by five cents from 23.5 cents per gallon to 18.5 cents per gallon;
  • Index the 18.5 cents per gallon state gasoline tax to the Consumer Price Index;
  • Phase-in application of the state sales tax on the wholesale price of gasoline starting at two percent July 1, 2013 and increase to four percent July 1, 2014;
  • Transportation to receive a percentage of revenue generated by implementation of the federal Marketplace Equity Act (enabling states to apply sales tax to internet sales, provided passage by Congress.);
  • Index transit fares charged by the Maryland Transit Administration to the Consumer Price Index;
  • State Treasury to issue General Obligation Bonds for federally required environmental improvements.
So what is the wholesale price of gasoline and the effect of a 2% sales tax?  It is a hard item to find out but very roughly at a retail price of $3.70 per gallon the constant flux of crude oil cost would be about $2.64 with refinery cost of $.21 per gallon so about $2.85.  Added to it are distribution costs federal underground storage tank tax, etc plus the 23.5 cent per gallon tax so if the tax is reduced a nickle and the wholesale price of gas is taxed at 2% which is 5.7 cents the cost would increase .7 cents, if the price would stand still which we know ain't going to happen than 1.4 cents would be added to the price of a gallon of gas.  Doesn't sound like that much but crude and refinery cost can double over night

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