Monday, May 12, 2008

Governor Suspends Gas Tax on Off-Road Diesel

Today Governor Sonny Perdue signed an executive order suspending the collection of the state gas tax on diesel sold for off-road uses. Governor Perdue also signed several agricultural-related pieces of legislation during his visit to Farm Bureau headquarters in Macon: Senate Bill 515, House Bill 649, and House Bill 1178 and House Bill 1088.

“Our farmers have borne the brunt of this multi-year drought, and now face record fuel prices during our planting season,” said Governor Sonny Perdue. “Suspending this tax will bring needed relief to our state’s largest industry.”

Governor Perdue discussed this idea with the General Assembly’s Rural Caucus towards the end of the 2008 session. The Georgia House and Senate each passed resolutions urging the Governor to consider suspending the tax. The Georgia Farm Bureau has also asked Governor Perdue to consider this action.

“Suspension of the sales tax on off road diesel fuel would help farmers, it would promote a major segment of our state’s economy, and it would allow for more money to be spent in local rural economies,” Georgia Farm Bureau President Zippy Duvall wrote in a letter to the Governor.
Suspension of the tax will save farmers and timber owners the four percent sales tax charged on off-road diesel. The state does not charge an excise tax on this type of fuel, and the executive order does not impact local taxes that are levied. The suspension is expected to offset state revenues by $2 million to $4 million. Off-road diesel is dyed red to differentiate it from on-road diesel, which is not affected by this suspension.

Pursuant to state law, the tax will be suspended until the General Assembly meets again. The legislature has adjourned its regular 2008 session, which means the next meeting of the General Assembly is expected to be in January 2009.

The suspension is effective immediately.

Today Governor Perdue also signed legislation that will continue to support Georgia’s agricultural community. SB 515 sponsored by Sen. John Bulloch changes the membership of the Seed Commission and dissolves the Commission’s statutorily created advisory board and HB 649 sponsored by Rep. Tommy Smith establishes an Agricultural Commodity Commission for blueberries. HB 1178 sponsored by Rep. Ellis Black extends state sales and use tax exemption sunset on liquefied petroleum gas or other fuel used in a structure in which swine are raised to June 30, 2010. HB 1088 allows the Department of Transportation to place directional signs on the state highway system that directs passing traffic to an agricultural tourist attraction; this legislation is sponsored by Rep. Butch Parrish.

The Governor’s Executive Order is below:

Whereas: The price of dyed fuel oils, as used primarily for off road, agricultural uses, including timber growing or harvesting, has risen substantially; and

Whereas: This spike in the price of dyed fuel oils has produced an acute strain on Georgia’s agricultural and timber growing or harvesting sectors; and

Whereas: These circumstances make it appropriate to exercise the authority vested in the Governor pursuant to Code Section 45-12-22 of the Official Code of Georgia Annotated, to suspend the collection of taxes, or any part thereof, due the state; and

Whereas: Suspension of the collections of state sales and use taxes on dyed fuel oils used for off road purposes may give additional incentive to certain individuals to purchase tax-exempt motor fuel from a licensed distributor designated and formulated for non-highway use and to subsequently use or permit the motor fuel to be used for highway purposes, such activity being unlawful pursuant to O.C.G.A. § 48-9-17; and

Whereas: The public is hereby reminded that any person who violates O.C.G.A. § 48-9-17 “shall be punished by a fine of not less than $1,000.00 nor more than $10,000.00 or by imprisonment for not less than 30 days nor more than 12 months, or both.”

Now, therefore, pursuant to the authority vested in me as Governor of the State of Georgia, it is hereby

Ordered: That the collection of the 4% state sales and use tax as that tax applies to sales of dyed fuel oils as defined in paragraph 5.1 of Code Section 48-9-2 of the Official Code of Georgia Annotated which is used exclusively for agricultural and timber growing or harvesting purposes and not for highway use as defined in paragraph (8) of Section 48-9-2, be suspended commencing with all sales occurring immediately following the last moment of May 11, 2008, until the General Assembly acts upon this Order.

This 12th day of May, 2008.

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