Local News

House Democrats Introduce Legislation To Cap State Gas Tax

Posted May 24, 2006

— State House Democrats Tuesday introduced legislation to cap the state tax on gasoline at 30 cents per gallon.

Under current law, which is set to be readjusted on July 1, 2006, the tax rises and falls depending on the wholesale price of gas, but under the proposed legislation, the rate could decrease but not rise above current levels.

The bill also seeks to increase enforcement of price gouging by expanding the state's current definition of "disaster" to include "economic well-being." Under current law, the state is only allowed to investigate price gouging in a state of disaster or emergency.

Currently, the motor fuels tax in North Carolina has two parts: a flat tax and a variable tax that is adjusted two times a year based on the average wholesale price of gas. Since 1992, North Carolina law automatically increases the state's gas tax when there is a substantial increase in the cost of fuel. With this proposed legislative cap, the rate could decrease but it will not go above current levels.

The state gas tax, currently 29.9 cents per gallon, is based on a flat tax and a variable tax that is adjusted twice a year based on the average wholesale price of gas.

The average price of gas in the state, as of Tuesday, was about $2.78 per gallon.

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