Sound Off

I was just reading the story on sales tax collections and their increase. My question is: Because the price of gasoline has increased, how much of this increase in sales tax can be attributed to that?

None. The tax people pay for gasoline is an excise tax, not a sales tax. Thus, none of the sales tax money the city receives is derived from gasoline sales. The city does receive a separate check from state officials for the city's share of the excise tax collected on gasoline. The excise tax, unlike a sales tax, is not based on a percentage. Instead it just adds a certain number of cents to each gallon of gasoline sold. That means that increases in gasoline prices sometimes actually result in fewer tax dollars because people are less likely to buy as many gallons of gasoline when prices are high.


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