Tax error resulted in higher gas prices in D.C.

WASHINGTON – A mistake by the D.C. Office of Tax and Revenue resulted in gas wholesalers charging gas stations 23 percent more than they should have, with the extra cost potentially passed along to consumers.

The District on Oct. 1 moved to an 8 percent tax on wholesale gasoline to replace the current per-gallon tax.

But when the tax office made the calculations for the new price, The Washington Post reports the city did not calculate the new tax on the wholesale price. The tax office used the retail price, which includes federal and D.C. taxes.

The change was supposed to be “revenue-neutral” and not increase the 23.5-cent-per-gallon tax.

In the first week of October, wholesalers overcharged gas stations by as much as $95,000, the Post reports.

The Washington, Maryland, Delaware Service Station and Automotive Repair Association noticed the change, which it says added up to an extra 5.3 cents a gallon for drivers at the gas pump.

But the deputy chief financial officer for the Office of Tax and Revenue isn’t certain that the hike was passed on to motorists, according to the Post.

The tax office wants wholesalers to refund the amount overcharged and for gas stations to refund drivers, something AAA Mid-Atlantic’s Lon Anderson doubts will happen.

Follow @WTOP on Twitter.

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