How new gas taxes could affect California businesses

FRESNO, Calif. (KFSN) -- Gas station owners like Taofik Haugr say the state's new gas tax hike will cut into his profits. The price of gas went up 12 cents a gallon Wednesday and 20 cents for diesel.

If drivers are forced to pay more at the pump, they will be less likely to spend extra on chips and soda inside.

"If they spend a lot of money on the gas, they can't come in and buy snacks. So that means small business is going to go out of business," said Haugr.

It's not just gas stations, the tax increase will impact a wide range of Valley businesses.

"We have lawn mowers, push and riding mowers, hedge trimmers, weed eaters, leaf blowers even chainsaws," said Francisco Reyes.

Equipment that all runs on gasoline. Reyes says the new price hike will force his landscaping business to pass the higher rates on to the customer.

"All our machines require gas--our trucks require diesel. So since everything is going up gas wise, we have to raise our price a little more to balance it out," said Reyes.

The tax was approved in April and is expected to bring in $5.2 billion a year for road and bridge repairs and improvements to mass transit. For now, Peter says he is willing to eat two cents of the tax and raised his price by just a dime per gallon.

"I have to do raise 12 cents but I don't raise 12 cents, I raise 10 cents but I have to pay the 12 cents to the government. I have to pay the 12 cents," said Haugr.