How a lot drivers pay on the fuel pump — averaging $3.22 per gallon in September — relies upon largely on the worth of oil and the price of refining it. However federal, state and native taxes and charges can add considerably to the whole.
On prime of a federal tax of 18.4 cents per gallon, most states levy a number of taxes and charges on a gallon of fuel. These embrace some mixture of excise taxes (imposed on items, companies and actions), gross sales taxes, environmental taxes and inspection charges.
These prices add as much as a median of 32.6 cents per gallon in state taxes, based on a NerdWallet evaluation of U.S. Vitality Info Administration information. Mixed with the federal tax, that’s about 51 cents per gallon, on common, factored into the fuel costs you see at your native station.
States with the best fuel tax
State tax charges fluctuate broadly. California’s price (69.8 cents per gallon) and Illinois’s price (67.1 cents) are highest, adopted by Pennsylvania (58.7 cents). Alaska has, by far, the bottom state tax (9 cents per gallon), adopted by Mississippi (18.4 cents) and Hawaii (18.5 cents).
2024 state fuel tax hikes
In lots of circumstances, fuel taxes are adjusted yearly based mostly on the client value index, a proxy for inflation calculated by the U.S. Bureau of Labor Statistics. Meaning taxes could rise (or fall) with the annual price of inflation. Typically states additionally section in new or larger charges by growing them incrementally.
As for what occurs with that tax income, states typically use it to fund infrastructure enhancements and environmental initiatives.
Oct. 1 fuel tax hike
Washington D.C.’s motor gasoline surcharge will tick up barely from 11.4 cents per gallon to 11.8 cents per gallon on Oct. 1, based on the D.C. Workplace of Tax and Income. That charge is added to the district’s 23.5-cent gross sales tax on gasoline. Altogether, drivers pay 35.3 cents per gallon in state taxes after they replenish.
July 1 fuel tax hikes
Gasoline taxes in seven states went up on July 1, usually by lower than 2 cents.
California’s excise tax on fuel rose from 57.9 cents per gallon to 59.6 cents per gallon, based on the California Division of Tax and Payment Administration. When different state taxes and charges are taken under consideration, the state tax on a gallon of gasoline in California rose from about 68 cents to about 70 cents.
Colorado’s street utilization charge elevated from 3 cents per gallon to 4 cents per gallon, based on the Colorado Division of Income. Moreover, an environmental charge elevated from 0.6 cents per gallon to about 1.3 cents per gallon. These charges are on prime of a 22-cent fuel tax. Altogether, the state tax on fuel elevated from about 26 cents per gallon to about 28 cents per gallon.
The Illinois fuel tax elevated from 45.4 cents per gallon to 47 cents per gallon, based on the Illinois Division of Income. All informed, the state tax on fuel elevated from 66.5 cents per gallon to 67.1 cents per gallon in state taxes — the second highest within the nation.
In Indiana, the fuel tax elevated from 34 cents to 35 cents per gallon, based on the Indiana Division of Income. Along with the excise tax and a 1-cent oil inspection charge, the state costs a gasoline use tax. That tax price is adjusted on a month-to-month foundation. In July, the use tax price is 20.1 cents per gallon. In all, Indiana drivers pay state taxes totaling 56.1 cents per gallon.
Missouri’s motor gasoline tax price elevated from 24.5 cents per gallon to 27 cents per gallon, based on the Missouri Division of Income. Mixed with two different charges levied on a gallon of fuel, totaling about half a cent, the state taxes add as much as 27.5 cents per gallon.
Nebraska’s gasoline tax price went up half a cent to 29.6 cents per gallon, based on the Nebraska Division of Income. Mixed with an environmental charge, drivers within the state pay 30.5 cents per gallon in state taxes.
The Virginia motor fuels tax price elevated from 29.8 cents per gallon of fuel to 30.8 cents per gallon, based on the Virginia Division of Motor Autos. The state’s motorized vehicle fuels gross sales tax price for fuel elevated from 8.7 cents per gallon to 9 cents. In all, motorists pay 40.4 cents per gallon in state taxes.
