Gov. Mike Braun (R-IN) recently announced that he was suspending the state’s 7% sales tax on gasoline sales for 30 days. A few days earlier, Gov. Brian Kemp (R-GA) declared a similar two-month pause in the state’s 33-cent gasoline tax and 37-cent diesel tax.
What do these two leaders have in common? Braun and Kemp are each proud small business owners, and both are longtime members of the National Federation of Independent Business. They understand the serious impact that a rapid rise in fuel costs has on a business.
NFIB represents nearly 300,000 small business owner members across the United States. Over the last few years, we have heard a rising number of concerns around the cost of energy and how it impacts small businesses.
Earlier this year, the results of NFIB’s national energy survey showed that more than 80% of small businesses saw energy as a “significant” cost factor in their operations, and 42% had seen costs grow “substantially” in the last three years. High energy costs do not stop with the business owner. A majority in the survey reported that they had been forced to raise consumer prices to manage these new inputs.
This research was conducted before the recent surge in gasoline and diesel prices. According to GasBuddy, the average price for a gallon of gas today is approaching $4.25. That is an increase of nearly $1.00 since this time last year, with diesel prices surging even higher, up over $2.00 during that same period.
Previous NFIB research showed that nearly all (96%) of small employers reported that higher gas and fuel prices have some degree of a negative impact on their business. Considering that 99% of all businesses in the U.S. are classified as small, affordable energy is essential for the overall health of the American economy.
When energy is affordable and reliable, business owners can operate with the certainty they need to bolster their local economies, create more jobs, and give back to their communities across the country.
State and federal gas taxes account for approximately 11% of the average retail price, according to the Congressional Research Service. The quickest way to provide relief to small business owners is to cut this out of the picture and give consumers an immediate, recognizable break.
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Pro-small business governors in multiple states are recognizing this truth. Congress, now it is your turn to act. The federal excise gas tax is 18.3 cents per gallon of gas and 24.3 cents per diesel gallon. Small businesses urgently need you to temporarily suspend these collections to help them adjust to the new prices.
As a business owner, so many things are out of your control. As a member of Congress, they are not. Washington can, and must, act quickly to suspend the federal fuel tax and provide relief for small business owners across the nation.
Louis Bertolotti is a principal of Federal Government Relations at the National Federation of Independent Business.