Entrepreneurs who build new gas stations in the District could be in line for a slew of tax breaks, but critics argue that a bill to that effect before the D.C. Council is a gift to large corporations that will have little impact on business decisions.
Legislation introduced Tuesday by Council Member Carol Schwartz, R-at large, would strike the sales taxes on building materials required to construct a new station and exempt the owner from licensing fees, property taxes and personal property taxes for seven years.
The number of gas stations in Washington has fallen 35 percent over the past 30 years to just 88, or 1 per 6,500 residents, straining the District’s gas tax-dependent Highway Trust Fund and sending drivers out of the city in search of fuel, Schwartz said.
“This bill will help to ensure that our gasoline tax revenues do not fall short in the future,” she said. “It would also shorten the drive that many of our residents and visitors must take to even find a gas station in our city.”
According to the Washington, Maryland, Delaware Service Station and Automotive Repair Association, 95 percent of all D.C. gas stations are leased from large corporations, either the big oil companies or distributors such as Eastern Petroleum.
In effect, Schwartz’s tax incentive is a tax break for Big Oil, said Harry Murphy, the association’s director of technical services.
“The dealer’s not going to get a darn thing out of this, I can tell you that right now,” Murphy said.
Ed Lazere, director of the D.C. Fiscal Policy Institute, said tax incentives are an easy but ineffective carrot. The research is clear, he said: Tax breaks do not drive businesses’ behavior.
“We often find these tax incentives are inefficient,” Lazere said. “They give tax breaks to people who would come here anyway.”
