Gasoline Taxes Mask Net State Tax Revenue Decline Again

Dave Williams

Monday, October 23rd, 2023

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For the second month in a row, Georgia tax collections last month were in the black compared to September of last year only because the state’s tax on gasoline and other motor fuels wasn’t in force then.

While tax revenues in September rose by 6.4% compared to the same month a year ago, when adjusted to account for the gas tax money collected last month, adjusted revenues were actually down by 3.2%.

Individual income tax receipts for last month compared to September of last year declined by 10.5%. The decrease was driven by the combination of a 70.4% increase in refunds issued by the Georgia Department of Revenue and a 25.4% decline in tax return payments.

Net sales tax revenues rose by 9.5% in September, while corporate income taxes were up by 13.8%.

Motor fuel tax receipts for September increased by $199.8 million compared to September of last year, when Gov. Brian Kemp’s executive order suspending collection of the tax was in effect for the entire month.

The suspension of gas taxes was in effect only during part of last month. Kemp reimposed the suspension on Sept. 13 of this year, citing inflation, and renewed the order this month to run through Nov. 11.

The same dynamics clouded the state’s revenue outlook for the first quarter of the current fiscal year. Tax revenues were up 6.1% for the three months ending Sept. 30, but that was only because the motor fuels tax was being collected for most of that time.

Without counting the gas tax money, tax collections in July, August, and September declined by 1.3% compared to the first quarter of the last fiscal year.