NC Gov Stein signs gas tax holiday into law

North Carolina Gov. Josh Stein Friday signed a bill to suspend the state’s 41-cent per gallon gas tax until the end of November. State lawmakers approved it nearly unanimously Wednesday.

The measure also extends a waiver for the on-road use of dyed diesel until the end of the year. Farmers can buy red-dyed diesel, which is not subject to state or federal tax, for use in farm machinery, but it’s illegal to use it for on-road transportation. Stein had already suspended that law to help farmers get their crops to market more cheaply.

“I am signing this bill to keep more money in people’s wallets, but this temporary relief is just one step,” Stein said. “I remain committed to continuing to work with anyone who wants to make everyday living more affordable all year long — not just during election season.”

NC legislators can’t say how much of the gas tax cut will trickle down to drivers

The new law takes effect immediately, but it may take some time before prices at the pump go down. That’s because the law allows retailers to recoup the taxes they’ve already paid on the gas in their storage tanks. As gas stations refill their storage tanks, their cost per gallon should go down, so the retail price should, too.

It’s also unclear how much relief will actually be passed on to taxpayers. State House Speaker Destin Hall, R-Caldwell, told reporters Wednesday the price break will likely be closer to 30 cents per gallon than 41, based on other states’ experiences with gas tax holidays. And the base price of gas is largely determined by global markets.

In a statement Friday, Hall credited Republican lawmakers’ fiscal policy for making the gas tax holiday possible without reducing funding for roads. The estimated cost of the seven-month suspension is $362.3 million. Lawmakers are taking money from state reserves to backfill the revenue loss for the N.C. Department of Transportation.

“Years of responsible budgeting have put North Carolina in a position to provide meaningful relief when families need it most, and pausing fuel taxes is another way House Republicans are working to make our state more affordable for everyone,” Hall said.

Stein held the signing ceremony in Buncombe County at the farm of fellow Democrat Jamie Ager, who’s currently running for the open 11th Congressional District seat against Republican Jennifer Balkcom.