States with the Highest Gas Taxes

01 Top 10 and Bottom 10 States

The Federal Highway Administration publishes state motor-fuel tax rates quarterly. Combined with the federal excise tax of $0.184 per gallon, total gas tax burden varies by more than $0.60 per gallon across states. The table below shows the 10 highest-tax and 10 lowest-tax states as of January 2025.

02 Tax Components

Gas taxes are not a single flat rate. They typically consist of several layered components that vary by state:

• Federal excise tax ($0.184/gallon): Set by Congress in 1993 and unchanged since. Applied uniformly in all 50 states. Funds the Highway Trust Fund for federal road and bridge projects.
• State excise tax (varies): The primary state fuel tax, set by state legislatures. Ranges from $0.09 (Alaska) to roughly $0.60 (California, Illinois). Some states index this rate to inflation or fuel prices.
• State sales tax on fuel: Several states (including California, Illinois, Indiana, and Michigan) apply their general sales tax to gasoline purchases in addition to the excise tax, further increasing the effective rate.
• Underground storage tank fees: Small per-gallon fees ($0.005–$0.02) in many states to fund cleanup of leaking fuel storage tanks.
• Inspection and environmental fees: Additional per-gallon assessments in some states for fuel quality testing and environmental programs.

03 Annual Tax Cost by Vehicle

The annual fuel tax burden varies dramatically by state and vehicle type. A vehicle consuming more gallons per year pays more in fuel taxes regardless of the price of gasoline. The table below shows estimated annual gas tax paid in high-tax and low-tax states for three representative vehicle types.

04 Recent Tax Changes

While the federal gas tax has not changed since 1993, state gas taxes have been far more dynamic. Since 2020, at least 12 states have raised their gas tax rates, often through automatic adjustment mechanisms tied to inflation, construction cost indices, or fuel prices. This trend reflects growing infrastructure funding needs and the declining purchasing power of fixed-rate taxes.

• Inflation-indexed states: California, Illinois, Indiana, Maryland, Michigan, and several others now adjust their gas tax annually based on the Consumer Price Index or other inflation measures. These states see small annual increases without legislative action.
• Legislated increases: States including Virginia, Ohio, and Missouri passed multi-year gas tax increase schedules between 2019 and 2022 to fund transportation infrastructure.
• Temporary reductions: Several states (including Connecticut, Georgia, and Maryland) temporarily suspended or reduced gas taxes during the 2022 price spike, though all have since reinstated full rates.

05 Tax as Share of Pump Price

The share of the retail gas price attributable to taxes varies depending on the base price of fuel. When gas costs $3.00 per gallon before taxes, the $0.50 national average tax adds about 17% to the final pump price. In a high-tax state like California, taxes represent roughly 22–25% of the total pump price.

However, when crude oil prices drop and pre-tax gasoline falls to $2.00 per gallon, that same $0.50 tax becomes 25% of the pump price. Conversely, when pre-tax gas rises to $4.00 per gallon, taxes shrink to roughly 12% of the total. This dynamic is why consumers notice gas taxes more acutely during periods of low crude oil prices.

The federal gas tax of $0.184 per gallon has lost roughly 50% of its purchasing power since it was last set in 1993, according to Bureau of Labor Statistics inflation data. Several policy organizations and the Congressional Budget Office have noted this erosion as a factor in declining Highway Trust Fund revenues.

06 Data Sources

1. FHWA: State Motor-Fuel Tax Rates, Table MF-121T, January 2025. fhwa.dot.gov
2. IRS: Publication 510, Excise Taxes; 26 U.S.C. §4081. irs.gov
3. EIA: "What We Pay For in a Gallon of Gasoline." eia.gov
4. BLS: Consumer Price Index, Inflation Calculator. bls.gov