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California gas tax drops but pump price may not

Published on NewsOK Modified: February 25, 2014 at 4:51 pm •  Published: February 25, 2014

CULVER CITY, Calif. (AP) — The state Board of Equalization voted Tuesday to reduce a gasoline tax by 3.5 cents per gallon — but that doesn't mean consumers will see a dip at the pump.

The board approved lowering the excise tax rate on non-diesel fuel from 39.5 cents to 36 cents for the fiscal year that begins on July 1, just as the summer driving season kicks in.

Gasoline suppliers pay the tax and aren't required to pass on the reduction to consumers.

"Historical data indicates that this legislation requiring the adjustment does not have an impact on overall gas prices," board Chairman Jerome E. Horton said in a statement. "However, it would be nice if this decrease in excise tax would result in a corresponding decrease in gas prices."

Even with the reduction, Californians will be paying the second-highest gas tax rate in the nation — more than 67 cents per gallon — after New York, according to petroleum industry figures.

The excise tax funds highway and mass transit projects. The board adjusts it annually and raised the tax by 3.5 cents per gallon last year.

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