Georgia's new gasoline tax goes into effect July 1, and will add approximately 7 cents to the cost of a gallon of gasoline.
The Georgia General Assembly passed HB 170 this year, which changes the way the state taxes gasoline. Currently, there is a 7.5 cent excise tax on each gallon of gas. Gasoline is also subject to the state sales tax of 4 percent, and local sales taxes. In Coweta, the local sales tax is 3 percent.
On Wednesday, the state sales tax will go away, and will be replaced with an excise tax of 26 cents. The local taxes won't change.
Diesel fuel will be subject to a 29 cent state excise tax.
HB 170 went through many changes during the legislative session, and the changes have been confusing to many.
Joe Crain Jr. of Newnan's Crain Oil said that everybody he talks to is "under the impression gas is going to go up 26 cents." But they are not realizing the 4 percent state sales tax is going away.
"It's awfully confusing. We as normal people can't understand it and we can't read it and make sense out of it," he said of the legislation.
There will be a significant tax increase, however, on diesel used for school buses.
Since 2013, diesel fuel used for school buses has been exempt from state excise taxes. "They were paying a 4 percent state sales tax. It's going to a 29 cent excise tax. I imagine you'll have some local schools boards that are having to sit down and scratch their heads," Crain said.
Dean Jackson of the Coweta County School System said the local system does not know exactly the impact the tax increase will have on them. The system has in recent years used approximately 500,000 gallons of diesel per year.
Earlier versions of the bill would have taken away local sales taxes on gasoline, including the school system's Education Special Purpose Local Option Sales Tax, or required that ESPLOST funds collected on motor fuel be used only for transportation projects.
"There certainly will be some sort of impact" to the school system's budget with the change," said Jackson, but it won't be nearly as bad as it would have been under previous versions.
When Crain Oil picks up gasoline from the Atlanta terminal, it pays the excise tax when it pays for the gas. When the gas is delivered to a gas station, the gas station "pre-pays" the sales tax.
Then, Crain Oil remits the sales tax to the state, which distributes the local portion to the county and school system.
Crain said that they'll be busy over the next few days trying to fill up as many tanks as they can before the gas increase kicks in Wednesday at 12:01 a.m.
"We'll be doing some steady hauling, that is for sure," Crain said.
Because all gasoline taxes are prepaid, the taxes won't change on gasoline that is already in the tanks at stations on July 1. The increase will go into effect the next time those tanks are filled.
Crain said their computers are already programmed to charge excise and sales tax, so the transition will be "just a matter of changing your numbers" in the computer and "making sure that your dealers understand what is going on and that their invoice will look differently on July 1."
Georgia is not alone in raising gasoline taxes, now that prices are significantly lower than they have been for the past several years. Thirteen other states have either approved or considered a gas tax increase this year, according to Gasbuddy.
Though taxes are going up, gas prices are slowly going down from what is hoped to be their summer peak. The Georgia state average for regular unleaded was $2.677 on Friday, according to AAA's fuelgaugereport.com website. That's down from $2.716 a week ago.