Fuel taxes in the United States

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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 January 2016, state and local taxes add 29.6 cents to gasoline and 29.38 cents to diesel, for a total US average fuel tax of 48.68 cents per gallon for gas and 54.40 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 5¢/gal (1.3¢/L) tax. 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.

The table below includes state and local taxes. 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 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 2016[5]
State Gasoline tax
(excludes federal tax of 18.4¢/gal)
Diesel tax
(excludes federal tax of 24.4¢/gal)
US (Volume-Weighted) Average 30.29 30.01
Alabama 20.87 21.85
Alaska 12.25 12.75
Arizona 19.00 27.00
Arkansas 21.80 22.80
California 40.62 34.30
Colorado 22.00 20.50
Connecticut 37.51 50.30
Delaware 23.00 22.00
District of Columbia 23.50 23.50
Florida 36.58 33.77
Georgia 31.02 34.66
Hawaii 42.35 39.55
Idaho 32.00 32.00
Illinois 30.18 33.40
Indiana 29.89 38.81
Iowa 32.00 33.50
Kansas 24.03 26.03
Kentucky 26.00 23.00
Louisiana 20.01 20.01
Maine 30.01 31.21
Maryland 32.60 33.35
Massachusetts 26.54 26.54
Michigan 30.54 28.49
Minnesota 28.60 28.60
Mississippi 18.79 18.40
Missouri 17.30 17.30
Montana 27.75 28.50
Nebraska 27.70 27.10
Nevada 33.85 28.56
New Hampshire 23.83 23.83
New Jersey 14.50 17.50
New Mexico 18.88 22.88
New York 42.64 42.10
North Carolina 35.25 35.25
North Dakota 23.00 23.00
Ohio 28.00 28.00
Oklahoma 17.00 14.00
Oregon 31.10 30.35
Pennsylvania 50.40 65.10
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 22.33 26.03
Washington 44.50 44.50
West Virginia 34.60 34.60
Wisconsin 32.90 32.90
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.[6] However, revenues from other taxes are also used in federal transportation programs.

Federal tax revenues[edit]

The federal gasoline tax raised $25 billion on gasoline in 2006.[7] The tax was last raised in 1993, and is not indexed to inflation. The inflation rate from 1993 until 2015 was 64.6 percent.[8]

Public policy[edit]

Some policy advisors believe that an increased tax is needed to fund and sustain the country's transportation infrastructure. The National Surface Transportation Infrastructure Financing Commission issued a detailed report[9] in February 2009. However, much of the gas tax revenue is diverted to other government programs and debt servicing unrelated to transportation infrastructure. [10]

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.[11]

Aviation fuel taxes[edit]

As of 2011, aviation gasoline (most often used to fuel small General Aviation aircraft) is taxed at 19.4¢/gal.[12]

As of 2007, jet fuel (called "kerosene for aviation" by the IRS) is taxed at 21.9¢/gal unless it is used for commercial aviation (airlines such as American Airlines and United Airlines and small chartered commercial jets). Because such commercial operations are subject to the federal transportation tax, they are subject to a reduced fuel tax of 4.4¢/gal.[13]

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:

References[edit]

  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, 10 January 2016
  4. ^ Corning, Howard M. Dictionary of Oregon History. Binfords & Mort Publishing, 1956.
  5. ^ [1], State Motor Fuel Taxes: Notes Summary.
  6. ^ Online NewsHour: Conversation | Peters Discusses Infrastructure | August 15, 2007 | PBS
  7. ^ http://financecommission.dot.gov/background%20documents.html National Surface Transportation Infrastructure Financing Commission
  8. ^ US inflation Calculator
  9. ^ [2]
  10. ^ http://www.wsj.com/articles/states-siphon-gas-tax-for-other-uses-1405558382
  11. ^ http://www.eia.gov/todayinenergy/detail.cfm?id=15531
  12. ^ [3]
  13. ^ [4]

External links[edit]