Fuel taxes in the United States

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State and Federal gas taxes in the United States.png
Federal and State Diesel fuel tax.png

The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] On average, as of July 2016, state and local taxes and fees add 29.78 cents to gasoline and 29.81 cents to diesel, for a total US average fuel tax of 48.18 cents per gallon for gas and 54.21 cents per gallon for diesel.[3]

State taxes[edit]

Gas tax by state, with border differences highlighted.

The first US state tax on fuel was introduced in February 1919 in Oregon.[4] It was a 1¢/gal tax.[5] In the following decade, all of the U.S. states (48 at the time), along with the District of Columbia, introduced a gasoline tax. By 1939, an average tax of 3.8¢/gal (1¢/L) of fuel was levied by the individual states.

In the years since being created, state fuel taxes have undergone many revisions[6] While most fuel taxes were initially levied as a fixed number of cents per gallon, as of 2016 nineteen states and District of Columbia have fuel taxes with rates that vary alongside changes in the price of fuel, the inflation rate, vehicle fuel-economy, or other factors [7]

The table below includes state and local taxes and fees. The American Petroleum Institute uses a weighted average of local taxes by population of each municipality to come up with an average tax for the entire state. Similarly, the national average is weighted by volume of fuel sold in each state. Because many of the states with the highest taxes also have higher populations, more states have below average taxes than above average taxes.

Taxes on gasoline and diesel for transportation by U.S. state in U.S. cents per gallon as of January 2017[8]
State Gasoline tax
(excludes federal tax of 18.4¢/gal)
Diesel tax
(excludes federal tax of 24.4¢/gal)
US (Volume-Weighted) Average 31.04 31.01
Alabama 22.91 21.89
Alaska 12.25 12.75
Arizona 19.00 27.00
Arkansas 21.80 22.80
California 38.13 40.01
Colorado 22.00 20.50
Connecticut 39.85 41.70
Delaware 23.00 22.00
District of Columbia 23.50 23.50
Florida 36.80 33.77
Georgia 31.09 34.19
Hawaii 44.39 41.83
Idaho 33.00 33.00
Illinois 34.01 35.32
Indiana 33.59 41.25
Iowa 30.70 32.50
Kansas 24.03 26.03
Kentucky 26.00 23.00
Louisiana 20.01 20.01
Maine 30.01 31.21
Maryland 33.50 34.25
Massachusetts 26.54 26.54
Michigan 40.44 41.08
Minnesota 28.60 28.60
Mississippi 18.79 18.40
Missouri 17.30 17.30
Montana 27.75 28.50
Nebraska 28.20 27.60
Nevada 33.52 28.56
New Hampshire 23.83 23.83
New Jersey 37.10 33.40
New Mexico 18.88 22.88
New York 43.88 42.68
North Carolina 34.55 34.55
North Dakota 23.00 23.00
Ohio 28.01 28.01
Oklahoma 17.00 14.00
Oregon 31.12 30.36
Pennsylvania 58.20 74.70
Rhode Island 34.00 34.00
South Carolina 16.75 16.75
South Dakota 30.00 30.00
Tennessee 21.40 18.40
Texas 20.00 20.00
Utah 29.41 29.41
Vermont 30.46 32.00
Virginia 22.39 26.08
Washington 49.40 49.40
West Virginia 32.20 32.20
Wisconsin 30.90 30.90
Wyoming 24.00 24.00

Federal taxes[edit]

The first federal gasoline tax in the United States was created on June 6, 1932 with the enactment of the Revenue Act of 1932 with a tax of 1¢/gal (0.3¢/L). Since 1993, the U.S. federal gasoline tax has been 18.4¢/gal (4.86¢/L). Unlike most other goods in the US, the price displayed includes all taxes, as opposed to inclusion at the point of purchase.

Then-Secretary of Transportation Mary Peters stated on August 15, 2007 that about 60% of federal gas taxes are used for highway and bridge construction. The remaining 40% goes to earmarked programs.[9] However, revenues from other taxes are also used in federal transportation programs.

Federal tax revenues[edit]

Federal fuel taxes raised $35.2 billion in Fiscal Year 2014, with $25.0 billion raised from gasoline taxes and $10.2 billion raised from taxes on diesel and special motor fuels.[10] The tax was last raised in 1993 and is not indexed to inflation. Total inflation from 1993 until 2015 was 64.6 percent.[11]

Public policy[edit]

Some policy advisors believe that an increased tax is needed to fund and sustain the country's transportation infrastructure. As infrastructure construction costs have grown and vehicles have become more fuel efficient, the purchasing power of fixed-rate gas taxes has declined.[12] To offset this loss of purchasing power, The National Surface Transportation Infrastructure Financing Commission issued a detailed report in February 2009 recommending a 10 cent increase in the gasoline tax, a 15 cent increase in the diesel tax, and a reform tying both tax rates to inflation.[13]

Critics of gas tax increases argue that much of the gas tax revenue is diverted to other government programs and debt servicing unrelated to transportation infrastructure.[14] But other researchers have noted that these diversions can occur in both directions, and that gas taxes and "user fees" paid by drivers are not high enough to cover the full cost of road-related spending.[15]

Some believe that an increased cost of fuel would also encourage less consumption and reduce America's dependence on foreign oil. Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil. However, due to increased domestic output (fracking of shale and other energy resource discoveries) as well as rapidly increasing production efficiencies, since 2008 this has already significantly reduced and expected to continue to fall.[16]

Aviation fuel taxes[edit]

Aviation Gasoline (Avgas), The tax on aviation gasoline is $.194 per gallon. When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $.141 per gallon.

Kerosene for use in aviation (Jetfuel), Generally, kerosene is taxed at $.244 per gallon unless a reduced rate applies. For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in non-commercial aviation, the tax rate is $.219. The rate of $.219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. The airport terminal doesn't need to be a secured airport terminal for this rate to apply. However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later.

These taxes mainly fund airport and Air Traffic Control operations by the Federal Aviation Administration (FAA), of which commercial aviation is the biggest user.

See also[edit]

US tax system:


  1. ^ http://www.eia.gov/petroleum/marketing/monthly/pdf/enote.pdf U.S. Energy Information Administration/Petroleum Marketing Monthly
  2. ^ http://www.fhwa.dot.gov/infrastructure/gastax.cfm US Department of Transportation, Federal Highway Administration: When did the Federal Government begin collecting the gas tax?
  3. ^ Motor Fuel Taxes, American Petroleum Institute, 9 August 2016
  4. ^ Corning, Howard M. Dictionary of Oregon History. Binfords & Mort Publishing, 1956.
  5. ^ [1], The Oregonian/Oregon Live, 12 December 2010
  6. ^ [2], Ang-Olson, Jeffrey, et al. Variable-Rate State Gasoline Taxes. Institute of Transportation Studies, University of California Berkeley, 1999.
  7. ^ [3], Institute on Taxation Economic Policy, 5 February 2016
  8. ^ [4], State Motor Fuel Taxes: Notes Summary.
  9. ^ Online NewsHour: Conversation | Peters Discusses Infrastructure | August 15, 2007 | PBS
  10. ^ https://www.fhwa.dot.gov/policyinformation/statistics/2014/fe10.cfm U.S. Department of Transportation, Federal Highway Administration
  11. ^ US inflation Calculator
  12. ^ [5], Institute on Taxation Economic Policy, 23 September 2013
  13. ^ [6]
  14. ^ http://www.wsj.com/articles/states-siphon-gas-tax-for-other-uses-1405558382
  15. ^ [7], Tax Foundation, 3 January 2014
  16. ^ http://www.eia.gov/todayinenergy/detail.cfm?id=15531

External links[edit]