Lawmakers Approve Gas Tax Suspension

Connecticut will suspend the 25 cents-per-gallon state gas tax from April 1 through June 30 in a bid to mitigate record high prices.

The state House and Senate unanimously approved emergency legislation March 23 suspending the tax.

Gov. Ned Lamont signed the bill, which does not apply to diesel, propane, or home heating oil, March 24.

HB 5501 also suspends public bus fares from April 1 through June 30 and adds a second week-long sales tax holiday beginning April 10 for clothing and footwear under $100.

The bill includes specific language directing gas stations to pass the tax savings to customers, with any violation “deemed an unfair or deceptive trade practice” and subject to penalties.

Transportation Fund

The bipartisan action followed March 10 calls by Republican lawmakers to suspend the state’s gross receipts tax, with Democrats and Lamont also offering proposals.

Connecticut has two state gas taxes, the 0.881% gross receipts tax capped at 26.4 cents after the wholesale price hits $3 a gallon, and the flat 25 cents-per-gallon tax that will be lifted for three months.

Motorists also pay the 18.4 cents-per-gallon federal gas tax or the 24.4 cents per gallon tax on diesel.

The gas tax suspension is expected to cost the state $90 million.

The gas tax suspension is expected to cost the state $90 million, impacting the Special Transportation Fund, which has a projected $381 million operating surplus for this fiscal year.

Maryland lawmakers approved a 30-day suspension of state gas and diesel taxes last week, with Georgia also lifting its gas tax until May 31.

Ohio, California, and West Virginia are also considering suspending state gas taxes. 

Federal pandemic relief funds will be used to cover the expected $8 million cost of providing free bus service.