SB 1396 Summary

• Excludes from sales and use tax the amount charged for gasoline in excess of $3.88 per gallon and diesel fuel in excess of $3.52 per gallon, including federally and state-imposed excise taxes but excluding state-imposed sales and use taxes.

• Requires the State Board of Equalization to reduce (but not increase) excise tax rates on gasoline and diesel fuels annually to maintain revenue neutrality and ensure combined tax rates do not exceed specified thresholds.

• Modifies revenue neutrality calculations for fuel excise taxes to account for actual revenues derived and any net revenue gains or losses in prior fiscal years.

• Takes effect immediately as an urgency statute to provide tax relief related to gasoline and diesel fuel prices.