Special Report

States With the Highest (and Lowest) Gas Taxes

16. Tennessee
> Tax as pct. of gas price: 11.0% (16th lowest)
> State fuel tax: 21.4 cents per gallon (12th lowest)
> Gas price: $1.94 (12th lowest)

Compared to other states, Tennessee is not a large producer of crude oil or natural gas.Yet, the price of gasoline remains among the lowest in the nation, largely due to low tax rates. Gas cost less than $2 per gallon, including the state fuel tax of 21.4 cents — the 12th lowest gas tax rate in the country.

17. Virginia
> Tax as pct. of gas price: 11.1% (17th lowest)
> State fuel tax: 22.4 cents per gallon (17th lowest)
> Gas price: $2.02 (23rd lowest)

After Congress failed to pass a law allowing states to tax online retail sales, Virginia hiked its gas tax to fund transportation spending. Virginia’s excise tax has both a fixed and a variable component, which depends on the gas price. Parts of the state also charge a sales tax on wholesale gas to fund transportation initiatives. The exact tax per gallon of gas therefore depends on both the gas price and the location of the gas station.

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18. Arkansas
> Tax as pct. of gas price: 11.1% (18th lowest)
> State fuel tax: 21.8 cents per gallon (13th lowest)
> Gas price: $1.97 (17th lowest)

Arkansas levies fuel taxes and fees totalling just under 22 cents per gallon, on the low end when compared to most states. Gas prices in Arkansas demonstrate just how much relief Americans are getting at the pump. The price across the state recently fell below $2 per gallon of gasoline. By comparison, just 12 months earlier, gas cost $3.09 a gallon in Arkansas, at the time among the lowest average prices in the nation.

19. Wyoming
> Tax as pct. of gas price: 11.2% (19th lowest)
> State fuel tax: 24.0 cents per gallon (21st lowest)
> Gas price: $2.15 (20th highest)

Wyoming has no income tax and relatively low state sales taxes, in part because the state gets much of its revenue from taxes on mining and energy extraction. Yet, in 2013, the state hiked its fuel tax by 10 cents per gallon, to 24 cents, in order to better fund its transportation spending. Highway spending accounted for nearly 10% of state expenditures in 2013, among the highest shares nationwide.

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20. Iowa
> Tax as pct. of gas price: 11.3% (20th lowest)
> State fuel tax: 22.0 cents per gallon (14th lowest)
> Gas price: $1.95 (16th lowest)

Iowa is the largest producer of ethanol, a component of almost all gasoline sold in the U.S.The state’s large-scale ethanol production may have help lower the overall price of fuel. Gasoline is taxed at 22 cents per gallon, and the overall cost is less than $2 per gallon, both among the lower rates nationwide.

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