California drivers are now paying a “global warming” fee added to the price of gasoline before sales tax, forcing them to pay a tax on top of a tax.
The state is charging gas retailers a new “global warming” cap-and-trade fee and retailers are passing the cost to consumers, but the consumer sales tax is calculated from the full pump price, which includes the cap-and-trade fee.
“The global warming fee, which is variable and could soar in the future, added about a dime this week,” Dan McSwain of UT San Diego said. “Then the state adds 2.25% of the full retail price – including those other fees and taxes – while city and county sales taxes add more (0.5% in most of San Diego County).”
Many drivers haven’t noticed the increase yet due to the plummeting gas prices, but they will eventually because the $0.10 per gallon fee is not a set price – it’s determined by California’s “cap-and-trade” market in which various industries trade their permits covering specific amounts of emissions, the total of which is capped by the state.
Written by Kit Daniels