SACRAMENTO, Calif. (KTXL) — Some California residents will see lower prices at the pump in October, but the California Department of Finance said not all drivers will benefit from the sales tax pause.
State leaders debated implementing some form of gas price relief for months earlier this year. Those talks turned eventually into the Middle-Class Tax Refund, a direct payment of up to $1,050 that will start to be distributed next month (though some may not receive their money until as late as January 2023).
Originally, Gov. Gavin Newsom wanted to send money directly to motorists with registered vehicles, while some members of the legislature wanted to pause state taxes on gas. Then, when the details of the state budget were released, most Californians learned that they’d be getting a tax refund, regardless of whether they had a car or not.
Still, there is some fuel price relief on the way for a limited number of drivers in the state.
The state budget that was passed included a one-year pause on the sales tax for diesel, which the California Department of Finance said will most directly benefit businesses.
“This pause will provide relief and reduce cost pressures from rising diesel prices to the businesses who utilize the bulk of diesel fuel in the state,” the department said. “Given the role diesel plays in goods transportation, rising diesel prices can significantly increase businesses’ operating costs, which in turn can indirectly affect the cost of a broad range of consumer products.”
Also included as part of the state budget’s broad-based relief plan are funds for emergency rental assistance, utility pay support, a temporary extension of child care and preschool family fee waivers, food bank support and support for other programs.
Many Californians are looking forward to the direct deposits – called “inflation relief payments” by state leaders – that will start to go out next month. In order to be eligible for the Middle-Class Tax Refund, residents must have filed state taxes for 2020 by October 2021.
Payments will range between $200 to $1,050 depending on how much recipients make and if they have dependents. Single filers making more than $250,000 or joint filers who make more than $500,000 do not qualify.