HB 170 (Substitute offered by the House Committee on Transportation)

This law is a massive revamp of Georgia's Transportation funding method. The law replaces the current state sales tax on motor fuel with a $.26/gallon excise tax for gasoline and a $.29/gallon excise tax for diesel.  The law also creates a $5/night tax on hotel rooms in Georgia and eliminates some tax credits for electric vehicles and tax breaks for Delta and other commercial airlines.  

While originally expected to produce $1 Billion to transportation infrastructure improvements, the final version is expected to add approximately $900 Million in new money for transportation. As far as impact on schools and education budgets, though much improved from the version originally introduced, the final version places a "cap" on the price per gallon that is subject to the 1% eSPLOST tax.

Specifically,

• The sale of motor fuels will continue to be taxed during the current eSPLOSTs, as well as in future eSPLOST collections.  However, effective 7/1/15, the tax will only apply to the cost of fuel that is below $3.00 per gallon.  This "cap" effectively limits the eSPLOST income to $.03/gallon, regardless of the actual cost of fuel above $3.00.  In the current environment, there is likely to be little impact, as both gasoline and diesel are currently available in most locations for less than $3.00 per gallon.  However, should we experience rising fuel prices above $3.00/gallon, the eSPLOST will provide less funding for local districts than it has in the past.
• Further, current exemptions of motor fuel tax for school buses expire.  School districts will once again be paying tax on motor fuel.