Katerina Swanson
In the state of Georgia, an excise tax is imposed on distributors who sell or use motor fuel, including special fuels, at a rate of $0.26 per gallon. This tax rate is subject to annual adjustments based on the average miles per gallon of new vehicles registered in the state. During periods of state emergencies, such as Hurricane Helene in 2024, the collection of motor fuel and diesel fuel taxes may be temporarily suspended to provide financial relief to residents. Georgia also offers incentives for alternative fuel vehicles, including tax credits and grants for purchasing cleaner school buses.
| Characteristics | Values |
|---|---|
| Excise tax on motor fuel | $0.26 per gallon |
| Excise tax on diesel fuel | $0.29 per gallon |
| AFV license plate eligibility | Electric, natural gas, propane, bi-fuel, and dual-fuel vehicles |
| Tax credit for vehicle conversion | 10% of the cost up to $2,500 per vehicle |
| Tax credit carry-forward period | Up to 5 years (reducing to 3 years from January 1, 2025) |
| Gas tax suspension | Extended to May 1, 2025 |
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What You'll Learn
Georgia's fuel tax was temporarily suspended
During the State of Emergency, Georgia residents experienced a brief respite from the state's excise tax on motor fuel. Ordinarily, an excise tax of $0.26 per gallon is imposed on distributors selling or using motor fuel within the state, excluding diesel fuel. For diesel fuel, the excise tax rate is slightly higher at $0.29 per gallon. These tax rates are subject to annual adjustments to account for changes in fuel efficiency and the Consumer Price Index.
The temporary suspension of the fuel tax provided much-needed financial relief to Georgians impacted by the hurricane. With the waiver of the excise tax, residents could purchase motor fuel and diesel fuel without incurring the additional cost of the state tax. This measure was particularly beneficial for those who heavily relied on fuel for their essential needs. The suspension of the fuel tax demonstrates the state government's commitment to supporting its residents during times of crisis.
However, it is important to note that the fuel tax suspension was a temporary measure tied to the State of Emergency declaration. Once the State of Emergency ended, the fuel tax suspension was lifted, and the standard excise tax rates on motor fuel and diesel fuel came back into effect. While the suspension period offered a brief financial break, the resumption of fuel taxes signalled a return to the regular tax structure in Georgia.
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The standard rate is 26 cents per gallon
In Georgia, an excise tax is imposed on distributors who sell or use motor fuel within the state. The standard rate is 26 cents per gallon, although diesel fuel is taxed at a higher rate of 29 cents per gallon. This tax rate is subject to annual adjustments based on changes in fuel efficiency and the Consumer Price Index.
The tax applies to all motor fuels, including special fuels, and is typically paid by the distributor rather than the purchaser. However, if a purchaser buys special fuel from a distributor and uses it for highway purposes without a valid license or exemption, they become liable for the tax.
Georgia has temporarily suspended fuel taxes in the past due to state emergencies, such as Hurricane Helene, to provide relief to residents. These suspensions are typically accompanied by extensions on tax deadlines. The state also offers incentives for alternative fuel vehicles (AFVs), such as electric, natural gas, and propane-powered vehicles, which are eligible for special license plates and exemptions from certain fees and tolls.
The Georgia Department of Education also provides grants for local educational agencies to purchase new electric, compressed natural gas, or propane school buses, demonstrating a commitment to promoting alternative fuels and reducing emissions. These incentives and grants encourage the adoption of cleaner and more environmentally friendly fuel sources in the state.
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Diesel fuel is taxed at 29 cents per gallon
In Georgia, an excise tax is imposed on the sale or use of motor fuel within the state. For diesel fuel, the tax rate is 29 cents per gallon, while for other types of motor fuel, the tax rate is 26 cents per gallon. This tax is levied on distributors and is intended to be passed on to the consumer at the time of purchase.
The tax rate for diesel fuel in Georgia has been subject to change over time. For example, in response to Hurricane Helene, the state temporarily suspended the collection of motor fuel and diesel fuel taxes to provide relief to residents. This suspension was in place until October 16, 2024, and was accompanied by an extension of the state of emergency declaration.
The calculation of the excise tax rate on motor fuels in Georgia is based on various factors. From July 1, 2016, onwards, the tax rate has been adjusted annually. The adjustment takes into account the average miles per gallon of new vehicles registered in the previous year and the change in fuel efficiency from the preceding year. Additionally, until July 1, 2025, the Consumer Price Index is also considered in the calculation.
Georgia has specific provisions for fuels that are not commonly sold or measured by the gallon, such as natural gas and propane. In such cases, the tax is based on the gasoline gallon equivalent (GGE) of the fuel. For example, a GGE of electricity is defined as not exceeding 11 kilowatt-hours, while a GGE of compressed natural gas (CNG) must be at least 110,000 British thermal units.
It's important to note that the tax rates and policies mentioned above may be subject to change over time. For the most up-to-date information, it is recommended to refer to the official websites and publications of the Georgia Department of Revenue and relevant legislative bodies.
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There are tax breaks for alternative fuels
The state of Georgia offers various tax breaks and incentives for the use of alternative fuels and vehicles. These incentives are designed to promote the adoption of more environmentally friendly alternatives to traditional gasoline-powered vehicles.
One such incentive is the alternative fuel vehicle (AFV) license plate program. Electric, natural gas, propane, bi-fuel, and dual-fuel vehicles are eligible for an AFV license plate, which offers several benefits. AFVs displaying the proper alternative fuel license plate may use HOV and HOT lanes regardless of the number of passengers, and qualified AFVs may use the HOT lanes toll-free. However, it is important to note that alternative fuel vehicle fees are due at the time of initial vehicle registration and annually at the time of registration renewal. Additionally, plug-in hybrid-electric vehicle owners will not be subject to the alternative fuel vehicle fee unless they purchase a special alternative fuel license plate.
Georgia also offers tax credits for converting vehicles to run on alternative fuels. An income tax credit is available for 10% of the cost to convert a vehicle to natural gas, electricity, propane, or hydrogen, up to $2,500 per vehicle. If the tax credit is not used during any taxable year, it may be carried forward for up to five years. Beginning in 2025, the tax credit may be carried forward for up to three years.
The Georgia Environmental Protection Division (EPD) provides additional incentives for alternative fuels. The EPD offers funding for eligible projects that replace existing school buses with alternative fuel or zero-emission school buses. Eligible alternative fuels include electricity, natural gas, or propane. The Georgia Department of Education also provides grants to local educational agencies for the purchase of new electric, compressed natural gas, or propane school buses.
Furthermore, Georgia has laws in place to support the development of alternative fuel infrastructure. For example, any person or entity that provides electric vehicle (EV) charging services is not defined as a public utility, and an excise tax per kilowatt-hour applies to electricity sold at public EV charging stations. All public EV charging stations must be capable of accurately measuring and displaying the electricity dispensed on a per kilowatt-hour (kWh) basis, and violators may face fines of up to $1,000.
In summary, the state of Georgia offers various tax breaks and incentives to encourage the use of alternative fuels and vehicles. These include AFV license plate programs, tax credits for converting vehicles, funding for alternative fuel projects, and support for EV charging infrastructure. These incentives aim to reduce emissions and promote the adoption of more sustainable transportation options.
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The tax rate is adjusted annually
In Georgia, an excise tax is imposed on distributors who sell or use motor fuel within the state. The tax rate is adjusted annually on July 1, with the amount per gallon being automatically adjusted. The tax rate for motor fuel, excluding diesel fuel, is currently 26 cents per gallon, while the rate for diesel fuel is 29 cents per gallon.
The annual adjustment of the tax rate is calculated using the average miles per gallon of all new vehicles registered in Georgia in the previous year. The excise tax rate is multiplied by the percentage increase or decrease in fuel efficiency from the previous year, and this calculation is added to or subtracted from the previous excise tax rate to determine the preliminary excise tax rate. Once the preliminary rate is established, it is then multiplied by the annual percentage change in the Consumer Price Index, with this final calculation becoming the new excise tax rate for the upcoming year.
It is worth noting that Georgia recently experienced a temporary suspension of the state's excise tax on motor fuel and diesel fuel due to Hurricane Helene. This suspension was implemented by Governor Kemp through an executive order extending the State of Emergency and was intended to provide relief to communities relying on fuel during the recovery process. The standard tax rates are now back in effect, and Georgia residents are once again subject to the adjusted annual fuel tax rates.
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Frequently asked questions
Georgia has a fuel excise tax of $0.26 per gallon.
Yes, there is an excise tax of $0.29 per gallon on distributors who sell or use diesel fuel within the state.
Yes, there are some exemptions. For example, there is a tax exemption for fuel oils, compressed petroleum gas, or special fuel delivered directly to the consumer for heating purposes only.
Yes, there was a temporary suspension of the fuel tax in Georgia in 2024 due to Hurricane Helene.
