Special Report

States With the Highest and Lowest Gas Taxes

Not including the cost of crude oil, taxes are the single largest factor in determining how much Americans pay at the pump. Combined, federal and state taxes add more to the price of a gallon of gas than refining costs, retail markup, and transportation expenses.

The federal government and state governments use gasoline taxes to fund road construction and repair. Gasoline taxes also help preserve road conditions by making driving, which wears down on roadways, more expensive.

The federal government levies an 18.4 cent tax on every gallon of gasoline sold in the United States. On top of that, each state imposes its own tax — and in almost every case, the state tax is higher than the federal tax. A handful of states charge more than double the national tax level.

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

24/7 Wall St. reviewed state tax levels from industry advocacy group the American Petroleum Institute to identify the states with the highest and lowest gas taxes. Due largely to taxes assessed at the state level, motorists in some states are paying much more at the pump than in others — often, as much as 50% to 75% more.

How much a state chooses to tax a gallon of gas does indeed appear to affect residents’ driving habits. Nationwide, the typical motorist drives 14,318 miles a year. In seven of the 10 states with the lowest gas taxes, people tend to drive more. Meanwhile, people on average drive less in the eight of the 10 states with the highest gas taxes.

To identify the states with the highest and lowest gas taxes, 24/7 Wall St. reviewed state and average local gas taxes from the American Petroleum Institute. Average gas prices as of Jan. 11, 2019 for each state came from AAA’s Daily Fuel Gauge Report. We also reviewed average annual vehicle miles travelled in each state from the Federal Highway Administration.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.