state gas tax map by individual state taxfoundation.org

Gasoline Tax Now At 28% In Many US Markets, Some Markets Top 35%

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An odd effect of lower gas prices is that the percentage of tax on the fuel goes up dramatically.

AAA daily gas prices feb 16

According to AAA, the national average price for gasoline is now just $1.71.  These low prices are good news to the 99.9% of Americans who power their vehicles with gasoline.

Related: Electric Vehicle Sales Stall as Gas Prices Fall

Since gasoline is taxed not by percent, like most other goods and services, but by the gallon, as the price of gas goes down, the percent of tax goes up.  According to the American Petroleum Institute (API), the U.S. national average gasoline tax total is now 49.99 cents per gallon.

Therefore, the gasoline tax per gallon is a whopping 28% on average in the U.S. today.

state gas tax map api

The federal tax on gasoline is 18.4 cents per gallon.  This rate was set in 1993 by an act of Congress and signed by President Clinton.

Related: Toyota Says Low Gas Prices Will Hurt Prius Sales

States can set their own addition gasoline tax and also other fees according to whatever schedule and rate they choose.  According to API and taxfoundation.org, the highest gasoline tax as of this past July was in Pennsylvania at 51.6 cents per gallon (cpg).  Thus, in PA, motorists are paying 41% in tax on a gallon of go-juice.

New York, Hawaii, and California were the next three from the top all with a total tax to motorists of over 35%.  If you live in Alaska (12.25 state tax per gallon) or New Jersey (14.5 state tax per gallon), the two lowest tax states for gasoline, you are paying about 19% in taxes on gas.

state gas tax map by individual state taxfoundation.org

The gasoline tax is used as a revenue source to fund mostly road-related projects, though not all of the money is spent on roads and bridges for automobiles.  Train lines, airports, and even unrelated things like the Inland Fish and Game Fund in one state are paid for by gasoline taxes.  Other sources of revenue from automobiles include tolls, local excise taxes on the value of automobiles, sales taxes on new and used car sales, sales taxes on automotive parts and repairs, and state registration and inspection fees.

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John Goreham

John Goreham