Maryland Governor Pushes 6% Gasoline Sales Tax

The tax would apply to each gallon of gasoline, with the revenue going to road and transit.

February 01, 2012

ANNAPOLIS, Md. - On Monday, Maryland Gov. Martin O??Malley wants to raise the state??s gasoline tax by applying Maryland??s 6% sales tax to each gallon of gasoline, the Washington Post reports. His plan has a 2% per year phase-in of the tax at the wholesale level.

The sales tax would rise or fall with gasoline prices, which could push the cost of filling up in Maryland to among the highest in the United States. For example, 6% sales tax could reach 18 cents or higher, that, combined with Maryland??s other gasoline levy??s, would up the total taxes to more than 41 cents per gallon.

O??Malley plans to send a proposal to the legislature this week, and said on a radio talk show that he realizes it might not be popular. State residents need to think about "what all of us are paying right now in terms of idling in traffic congestion, time away from family, time away from work, that all of that is more expensive in the longer term than making this investment in transportation," he said.

Many Marylanders are opposed to increasing the cost of gasoline with an added tax. "The governor is walking into the biggest nightmare of working-class families," said Senate Republican leader E.J. Pipkin. "With this new gas tax, the citizens of Maryland will be paying premium and getting regular??Add that to his other proposed tax increases, and I don??t see how Maryland is attractive to businesses ?" the governor??s stated goal."

While wholesalers would pay for the tax, Maryland Comptroller Peter Franchot said such a tax would likely increases the cost for gasoline retailers, too. Seven states currently assess sales tax on gasoline, with neighbor Virginia??s total gas tax at a bit above 20 cents a gallon.

Currently, Maryland has a flat tax of 23.5 cents per gallon on gasoline. Annually, the state garners $738 million from its gasoline tax. The governor??s new proposal would add $600 million each year to the state??s coffers. The sales tax would be assessed on diesel, gasoline and special fuels, such as propane, methanol and ethanol.

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