Motor Fuel Taxes Rise in 10 States, Drop in 3
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Motor fuel taxes fell in three states but rose in 10 others after states on July 1 either recalculated their annual rates or adopted legislation to pay for highway infrastructure.
Fuel taxes dropped in Connecticut (7% lower), Kentucky (6%) and Maryland (less than 1%). For Connecticut drivers, diesel and biodiesel fuel excise taxes fell 3.5 cents per gallon to 48.9 cents for a 12-month term that extends through June 30, .
“This decrease will provide some relief on operating costs for businesses, the trucking industry in particular, and I am hopeful that relief will be shared with consumers,” .
Fuel taxes in Kentucky fell 1.4 cents to 22 cents per gallon for diesel and 25 cents for gasoline. The state’s Constitution requires that fuel tax revenue be allocated to a fund for building and maintaining state roads. The drop was triggered automatically by a state tax formula tied to wholesale fuel prices.
“I know every penny counts, and these savings can really add up,” said Gov. Andy Beshear. “Right now, .”
A slim decline (0.2%) in Maryland came via a formula linked to annual shifts in both pre-tax fuel prices and the U.S. Department of Labor’s Consumer Price Index. Diesel and biodiesel taxes in Maryland are now 46.75 cents per gallon, while gasoline, liquefied natural gas and compressed natural gas all are .
On the flip side, a combination of revenue calculations, mandatory incremental increases and legislation is leading to higher prices in other states.
In Alabama, a 1% annual percentage change in the National Highway Construction Cost Index lifted the state’s excise tax to 31 cents for diesel and to 30 cents for gas. The revenue is .
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In California, a state-adopted annual increase boosted the diesel rate by 1.2 cents per gallon to 46.6 cents and lifted the gasoline tax to 61.2 cents, a jump of 1.6 cents. Drivers in California are now paying 97.1 cents per gallon in taxes for diesel due to the combination of the .
Republican state lawmakers unsuccessfully appealed to Gov. Gavin Newsom to suspend the tax hikes, pointing to AAA data that indicated Californians were paying $1.57 per gallon more for gas than the national average, the most nationwide. “This is simply unsustainable for the constituents we represent,” nine Republican lawmakers .
Newsom in a June 25 statement replied, “California gas prices are 20 cents lower than one month ago and 17 cents lower than one year ago — despite a drawing attention to current prices. This annual inflation increase was enacted by the legislature in 2017 to help pay for road repairs — and overwhelmingly approved by voters in 2018 when they rejected a repeal attempt.”
Other states lifting fuel taxes include:
- Illinois — Rate increases tied to the CPI (up 2.5%) as well as for liquefied natural gas (2.4%) and went to 48.3 cents for gas (2.8%) and compressed natural gas (2.8%).
- Indiana — An inflation adjustment lifted by 3.4% to and to 36 cents (2.9%) for gasoline.
- Missouri — The final year of a lifted to 29.5 cents per gallon the tax for diesel, biodiesel and gasoline, a 2.5-cent increase.
- Nebraska — A 4.6% jump to 31.8 cents per gallon for is tied to a cyclical rate adjustment through Dec. 31.
- Virginia — Fuel taxes jumped 2.8% for and for gas to 32.7 cents a gallon after annual rate changes.
A Senate transportation bill in the Washington state legislature to raise diesel and gasoline taxes by 49.4 cents each per gallon was enacted despite controversy over the steep hike. As of July 1, the gasoline tax is 55.4 cents (up 12%) while the diesel/biodiesel rate is 58.4 cents (up 18.2%). The revenue is meant to make up for .
Rhode Island legislators bumped to 40 cents per gallon taxes for diesel and gas, a 3-cent per gallon increase. The state legislature revised a decade-old formula tied to inflation that would have .
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The legislation also . The split for the 3-cent increase sends 1 cent to the state transportation department and the remaining 2 cents to the Rhode Island Public Transit Authority.
Mississippi lawmakers enacted a new excise tax rate table for most fuels which calls for 3-cent rate increases every July 1 through 2028. For 2025, the rate stands at 21 cents per gallon.
Beginning in 2029, the cadence will shift to every other year and will limit annual increases to 1 cent per gallon. Funds from the tax increases will be .
