Governor Lowers State Sales Tax on Natural Gas for Home Heating

Monday, December 19, 2005

Contact: Office of Communications 404-651-7774

 

Tax on Natural Gas Cut in Half for Months of January through April, Pending Legislative Approval

ATLANTA - Governor Sonny Perdue signed today an Executive Order cutting in half the state sales tax on natural gas and liquid propane for residential heating. The Executive Order stipulates that Georgia’s sales tax on natural gas will be reduced during the peak home heating months of January through April 2006. Liquid propane will be reduced during the months of January through March 2006.

“State government should not reap a financial windfall because of unfortunate market conditions causing the cost of natural gas and liquid propane to rise,” said Governor Sonny Perdue. “This Executive Order will allow Georgia homeowners to keep more money in their pockets this winter.”

In Georgia, natural gas and liquid propane are subject to a four percent state tax of the total cost of the commodity. Governor Perdue’s Executive Order cuts the state sales tax in half to two percent during the peak home heating months. The tax reduction only applies to residential heating bills, and is expected to save Georgia taxpayers between $16 to 20 million dollars this winter.

Governor Perdue’s Executive Order requires legislative approval. Members of the state House of Representatives and state Senate were present at Governor Perdue’s announcement today and committed to swift approval of the measure through the 2006 Georgia General Assembly. Present at today’s announcement were Senators Don Balfour, Casey Cagle, Jack Hill, Mitch Seabaugh and Majority Leader Tommy Williams, Representative Mark Burkhalter, Floor Leader Rich Golick, Speaker Glen Richardson and Floor Leader Vance Smith.

In September 2005, Governor Perdue called for a one-month moratorium of the state tax on gasoline fuel. In a special session, the Georgia General Assembly ratified the Governor’s actions, and taxpayers saved more than $77 million during a time of great volatility in the gasoline market, due to Hurricanes Katrina and Rita.

Text of the Executive Order is provided below:

Executive Order

WHEREAS: Liquid propane gas and natural gas are essential commodities used by Georgians to heat their homes; and

WHEREAS: There has been a substantial rise in the price of liquid propane gas and natural gas since adjournment of the 2005 General Assembly such that the prices for liquid propane gas and natural gas for 2006 are projected to far exceed the 2005 prices for these commodities; and

WHEREAS: The significant increase in liquid propane gas and natural gas prices have and will continue to financially burden all Georgians who must use these commodities to heat their homes during the winter months; and

WHEREAS: The significant increase in the liquid propane gas and natural gas prices for the winter months of 2006 will result in a windfall to the state in the form of surplus sales and use taxes on these commodities; and

WHEREAS: Under these circumstances where a precipitous inflation in the price of essential commodities results in a windfall in tax revenues to the state, it is incumbent that such a surplus be returned to the taxpayers of Georgia.

NOW, THEREFORE, PURSUANT TO THE AUTHORITY VESTED IN ME AS GOVERNOR OF THE STATE OF GEORGIA AND BY SECTION 45-12-22 OF THE OFFICIAL CODE OF GEORGIA ANNOTATED, IT IS HEREBY

ORDERED: That half of the state sales and use tax pursuant to Code Section 48-8-30 as that tax applies to the liquid propane gas commodity sold and delivered primarily for residential heating purposes shall be suspended after the first moment of January 1, 2006, until the General Assembly acts upon this Order.

IT IS FURTHER ORDERED: That half of the state sales and use tax pursuant to Code Section 48-8-30 as that tax applies to charges for the natural gas commodity billed for residential use shall be suspended commencing with all billing cycles initiated after the first moment of January 1, 2006, until the General Assembly acts upon this Order.

This 19th day of December, 2005.

(Signed: Sonny Perdue)
GOVERNOR