Energy Economy

This Is the State With the Highest Gas Tax

A gallon of gasoline cost an average of $2.80 in the United States as of early March. These prices recovered from their sharp dip during the early months of the COVID-19 pandemic, when they fell as low as $1.74 per gallon due to crude oil prices briefly falling below $0 per barrel.

On a more local basis, how much Americans pay at the pump depends on several factors. The primary one is the price of crude oil, which is determined largely by global supply and demand. Other variables affecting the price of a gallon of gasoline include transportation and refining costs, as well as, of course, taxes.

The federal government levies a tax of 18.4 cents on every gallon of gas sold in the United States. On top of that, each state tacks on its own excise tax, which further drives up the cost of fuel. State-imposed taxes and fees can account for anywhere from about 5% of the total cost of gas to more than 20%, depending on where one lives.

To determine the highest and lowest gasoline taxes in every state, 24/7 Wall St. reviewed data on average state gas taxes in January 2021 from the American Petroleum Institute. Data on state gas tax totals does not include the federal gas tax of 18.4 cents per gallon. Supplemental data on average prices for regular gas by state came from GasBuddy. Prices were current as of Jan. 26, 2021. Data on annual vehicle miles traveled and the number of licensed drivers used to calculate annual vehicle miles traveled per capita by state in 2019 came from the Federal Highway Administration.

The federal and state governments use gasoline taxes to fund road construction and repair. Still, higher than average gas taxes do not always translate to well-maintained infrastructure.

With taxes charged at a per-gallon rate, they can add up quickly, particularly for Americans driving larger vehicles. Still, from a historic perspective, the price of gasoline today is relatively inexpensive in the United States. As recently as 2012, the average price was over $4 per gallon, adjusted for inflation.

California is the state with the highest gas tax. Here are details about gas prices and driving there:

> Avg. state gas tax: 63.1 cents per gallon
> Avg. gas price as of Jan. 26, 2021: $3.87 per gallon (the highest)
> State taxes as pct. of gas price: 16.3% (fourth highest)
> Annual miles traveled per driver: 12,915 (16th fewest)

Click here to see which states have the highest and lowest gas taxes.