The average cost for drivers at the gas pump in September was $3.22 per gallon, influenced by the price of oil, refining costs, and various taxes and fees. In addition to the federal tax of 18.4 cents per gallon, most states impose a combination of excise taxes, sales taxes, environmental taxes, and inspection fees, totaling an average of 32.6 cents per gallon in state taxes. When combined with the federal tax, this amounts to around 51 cents per gallon on average, impacting the gas prices consumers see at their local stations.
State tax rates vary across the country, with California, Illinois, and Pennsylvania having the highest rates, while Alaska, Mississippi, and Hawaii have the lowest. These taxes play a significant role in determining the final price consumers pay for gasoline.
Gas taxes are often adjusted annually based on the consumer price index, with some states implementing gradual increases to these taxes. The revenue generated from these taxes is typically used to fund infrastructure projects and environmental initiatives.
States with the highest gas tax
California, Illinois, and Pennsylvania have some of the highest gas tax rates in the country, while Alaska, Mississippi, and Hawaii have the lowest rates. These taxes contribute significantly to the overall cost of gasoline for consumers.
2024 state gas tax hikes
Gas taxes are subject to annual adjustments based on inflation, with some states gradually increasing these taxes over time. The revenue generated from these tax hikes is typically used to support various state initiatives and projects.
Each state has its own approach to managing gas taxes, with some opting for incremental increases to fund important state programs.
Oct. 1 gas tax hike
Washington D.C. will see a slight increase in its motor fuel surcharge from 11.4 cents to 11.8 cents per gallon on Oct. 1. This surcharge is added to the district’s 23.5-cent sales tax on gasoline, resulting in a total of 35.3 cents per gallon in state taxes for drivers.
July 1 gas tax hikes
Seven states implemented gas tax increases on July 1, with most seeing an uptick of less than 2 cents per gallon. These incremental increases contribute to the overall cost of gasoline for consumers.