States Tax Gasoline at Varying Rates
November 23, 2015
In addition to the 18.4 cents per gallon federal gasoline tax, the states also tax gasoline at varying rates and for varying reasons. Some states have sales taxes added to gasoline taxes while others have inspection fees, environmental fees, leaking underground storage tank (LUST) taxes, etc. The Federation of Tax Administrators has estimated the gasoline excise taxes, along with other state taxes and fees, to arrive at an estimate of the amount consumers are paying per gallon in each state. According to those estimates, Pennsylvania currently has the highest per gallon tax rate for gasoline; the Pennsylvania rate includes the Oil Franchise Tax for Maintenance and Construction, a variable rate tax adjusted annually. California, with an additional sales tax, and North Carolina, with an inspection fee, have the next highest rates. Alaska, with an 8-cent gasoline tax rate, has by far the lowest gasoline tax rate of any state.
State Gasoline Tax Rates, 2015
Note
Tax rates do not include local option taxes. In Alabama, 1 - 3 cents; Hawaii, 8.8 to 18.0 cent; Illinois, 5 cents in Chicago and 6 cents in Cook county (gasoline only); Nevada, 4.0 to 9.0 cents; Oregon, 1 to 3 cents; South Dakota and Tennessee, one cent; and Virginia 2.1%.Local taxes for gasoline and gasohol vary from 11.1 cents to 19.1 cents. Includes Inspection Fee, State Comprehensive Enhanced Transportation System (SCETS) tax, and Additional Local Tax. Carriers pay an additional surcharge equal to Illinois-19.3 cents (gasoline) 20.1 cents (diesel), Indiana-11 cents, Kentucky-2% (gasoline) 4.7% (diesel).Tax rate is based on the average wholesale price and is adjusted quarterly. The actual rates are: Kentucky, 9%; and North Carolina, 17.5¢ + 7%.Portion of the rate is adjustable based on maintenance costs, sales volume, cost of fuel to state government, or inflation. Large trucks pay an additional 12.6 cents for gasoline. Actual rate is 5.1%.Tax rate is reduced by the percentage of ethanol used in blending (reported rate assumes the maximum 10% ethanol).California gasoline subject to 2.25% sales tax.
Source
Compiled by Federation of Tax Administrators from various sources, January 2015. Site accessed September 29, 2015.