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California To Lower State’s Gas Tax

California is tweaking the state's gas tax formula. The excise tax is going down because gas consumption is up.

The price of gas gets a little cheaper in California on Tuesday because the State Board of Equalization is lowering the state's excise tax on gas.

rafael-castillo / Flickr

Light from gas pumps glow in the early morning darkness at a station in Castro Valley, California.

State law requires the board to review the gas tax each year. Last year the tax went up. This year it is going down because California drivers are buying more gas. The excise tax officially drops from 39 and a half cents a gallon to 36 cents.

Jerome Horton, chairman of the Board of Equalization, said California lawmakers changed the tax formula in 2010 to include a larger share of sales tax.

Horton said the excise tax balances the bite.

"If the consumers have used more fuel, as a result, paid more sales taxes. And if they paid more sales taxes we have to lower the excise tax to balance the amount of taxes collected," Horton said.

The end result of a yearly excise tax adjustment should have little impact on the the price at the pump. The gasoline tax bite, however, remains hefty.

California consumers pay about 70 cents a gallon in taxes and fees. The national average is about 50 cents a gallon.

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