Keith M. Phaneuf is absolutely correct in bringing attention to the gas tax holiday and how the vague statute regarding the April 1 law could spark unfair complaints of price gouging. We believe it could also lead to gasoline outages.
To be clear, we want to provide immediate relief to our customers but we can’t afford to eat an estimated $3.5 million in state taxes already paid in full!
Connecticut Attorney General William Tong is launching an unfair attack on gas station retailers around the state and threatening to fine them for not passing on the 25 cent excise tax right away when the law kicks in.
“You cannot in any way shape or form levy the 25 cent-per-gallon tax. You can’t back-date it, you can’t forward-date it and you can’t hedge your inventory,” Tong said in a Fox 61 interview on March 24, 2002.
Yet, Gov. Ned Lamont tweeted just yesterday that people may have to wait days to see the savings until gas station owners can sell off the taxed fuel already in their tanks.
We are utterly confused. So what is it?
Tong also told reporters that gas stations retailers were trying to make money from the gas tax holiday and encouraged the public to report any dealer who doesn’t comply starting April 1.
“If you have some reason to believe that a gas station owner says: you know what, I don’t care what the state is doing, I’ve got to survive, I’ve gotta make money, I’m going to charge that 25 cent-per-gallon tax, let us know and we’ll take action,” Tong said in that same Fox 61 interview.
To be clear, gas station owners are not trying to make money off of the tax holiday, but rather, trying not to lose money because of it — and a lot of money at that.
The 25 cent excise tax is built into the cost of fuel that is at your local gas station. When that fuel is delivered, the tax is paid. When the gas tax holiday kicks in and our tanks are full, or even half-full with inventory that is already taxed, our members could easily lose $3.5 million or more in just one day if we are not able to recoup the money already paid.
Remember, this is the government’s tax, not ours; taxes are a direct pass through to consumers!
When the market is this volatile, our family-owned and operated gas stations make just pennies per gallon in profits. The fact that the state and Attorney General Tong are asking us to essentially eat 25 cents per gallon is a slap in the face of businesses.
They are going after the little guy – not big oil. Refiners like ExxonMobil, BP and Shell are prohibited from owning and operating gas stations in the state. The people selling you gasoline are your neighbors. You see them at little league games, and at the grocery store. They are not an international business operating from a foreign nation.
The long and short of it is that we did not create this volatile market or high prices, and we certainly didn’t create the gas tax. What is happening now in Hartford is political grandstanding at its best. Politicians want to go after us and make us look like the bad guys and be seen on the front pages of newspapers cutting taxes, while they are sticking it to the little guy who is just trying to make a living like everyone else.
We are not the bad guys but rather small business owners who don’t think state government should be forcing us to lose millions of dollars in tax dollars already collected.
Think about that. If it happens to us, perhaps your business could be next.
Let’s be perfectly clear, we want immediate relief for our customers and applaud the gas tax holiday. We want the same things but the implementation of this law is what could ultimately fail us, and the consumers we serve.
From the beginning, we offered a simple solution to avoid this exact situation. We asked that the state refund the tax money already paid in full so that we could immediately pass on the savings to our customers. Many lawmakers were on board but it failed to pass into law.
What we asked for is not something out of the ordinary. Other states like Maryland did include gas stations credits in their version of the gas tax holiday.
We really tried to work this out effectively with Connecticut politicians. Many listened to our concerns and agreed, but it still did not get done.
Unfortunately, we don’t think the repercussions of this gas tax holiday will be so easy to ignore. We fear outages could happen as local owners try not to fill up their tanks with taxed fuel only to lose that tax money when the law kicks in on April 1.
We still have time to fix this. Let’s do the right thing for our small business owners and the people of Connecticut. They deserve relief and, so do we.
Chris Herb is president of Connecticut Energy Marketers Association which represents 70 percent of the gas stations in the state.