Originally created 12/20/05

Heat taxes set to drop



ATLANTA - Gov. Sonny Perdue and legislative leaders, hoping to offer relief from high home-heating costs, announced Monday a three-month reduction in the state sales tax collected on the use of natural gas and liquid propane.

The reduction, which will lower the tax to 2 percent from 4 percent, applies only to residential heating bills, according to Mr. Perdue's office. It is expected to provide $16 million to $20 million in relief overall.

Because of how the taxes are applied, the suspension will apply to liquid propane sales from January to March and to natural gas sales from January to April.

"This will ensure for both commodities a full three-month tax relief through the winter months," Mr. Perdue said.

In suspending the tax, the governor is returning to a method he used in September to try to rein in gas prices after Hurricane Katrina ravaged gas pipelines that supplied the state with much of its motor fuel. In that instance, the governor and the Legislature suspended all state taxes on gasoline for September and enacted price-gouging measures.

At the time, Democrats largely went along with the gas-tax suspension but questioned why the state wasn't doing more to prepare for the possibility of soaring natural gas prices once the coldest months of the year hit.

This time, Mr. Perdue said there was no emergency to trigger the price-gouging protections. In the case of the rising gasoline prices, the governor said, the higher charges were often caused by retailers looking to take advantage of consumer hysteria.

"We don't see the need for that (this time)," Mr. Perdue said. "It's more level. It's not panic on one particular day."

He said the size of the cut was based on the state's financial picture: "We did what we could afford."

Legislative leaders who aligned with Mr. Perdue said they were certain the House and the Senate would ratify the suspension of the heating fuel tax cut. House Speaker Glenn Richardson, R-Hiram, and Senate Majority Leader Tommie Williams, R-Lyons, both said they expected quick adoption.

"It's the compassionate thing to do," Mr. Williams said. "It's cutting the tax in half in the coldest months for those who really need it."

Reach Brandon Larrabee at (404) 681-1701 or brandon.larrabee@morris.com.

GAS TAX BREAK

State officials announced a three-month reduction in state taxes on natural gas and liquid petroleum, which will lower the tax to 2 percent from 4 percent. It applies only to residential heating bills and is expected to save consumers about $3 on a $150 bill or $6 on a $300 bill. Source: Georgia Gov. Sonny Perdue's office