September 23, 2022
Data source: U.S. Energy Information Administration, Federal and state motor fuels taxes table
In the most recent update of our Federal and state motor fuels taxes table, state gasoline taxes ranged from as low as 8.95 cents per gallon (/gal) in Alaska to as high as 65.1 cents/gal in California on July 1, 2022. Compared with January 2022, 13 states changed some part of their gasoline taxes.
Our data show that the simple average of taxes and fees on gasoline levied by the states and the District of Columbia increased to 31.67 cents/gal from the January 2022 average of 31.02 cents/gal. The tax rate changes varied widely by state, and some states temporarily lowered their tax rates.
Gasoline taxes increased the most in Indiana during the first half of 2022, 12.8 cents/gal higher, which is a 25% increase. The largest decrease in gasoline taxes during that time period was 16 cents/gal in New York, down 48%.
Data source: U.S. Energy Information Administration, Federal and state motor fuels taxes table
Note: Tax rates in states not shown did not change.
Notably, the increase in Indiana’s gasoline tax was mostly the result of a rise in the Gasoline Use Tax, which is calculated each month using a statewide average retail price for gasoline. Many states have adopted rate-adjustment mechanisms that raise or lower taxes based on one or more variables that reflect changes in the market value of gasoline. A portion of the total tax applied to on-highway fuel may be based on a recent history of either retail or wholesale prices or a combination of price history and other criteria, such as the U.S. Consumer Price Index (CPI), to determine the current rate of tax.
In other states, state legislative actions attempted to moderate the pressure of rising fuel prices on consumers by suspending some or all state taxes for various time periods. So far this year, Connecticut, Florida, Georgia, Maryland, and New York have suspended some or all state-level fuel taxes. New York lowered its fuel taxes 6.0 cents/gal for both gasoline and diesel for the rest of 2022.
In addition to state taxes, motor fuels are also subject to a federal tax. The federal tax has remained at 18.4 cents/gal for gasoline and at 24.4 cents/gal for diesel since 1993. These federal excise taxes are considered manufacturer taxes, meaning distributors, rather than consumers, pay them.
We update information about federal and state motor fuel taxes in the United States on a semi-annual basis, based on tax rates at the beginning of January and July each year.
Principal contributor: Maureen Klein
