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.
