Special Report

States With the Highest Gas Taxes

Americans are gradually returning to the nation’s roadways, after the pandemic had suppressed travel. Gas prices have followed suit. Drivers now pay an average of $3.31 per gallon, according to AAA, from the sharp drop during the early days of the coronavirus, when gallon prices tumbled to as low as $1.74. (You might want to consider buying one of the most fuel-efficient brand new cars on the market.)

What Americans pay at the pump depends on the price of crude oil, determined by global supply and demand forces; the cost of transporting the fuel and refining costs; and taxes. Taxes are one of the variables responsible for the fact that the price of gas varies from region to region in the United States. To determine the states with the highest and lowest gas taxes, 24/7 Wall St. reviewed data on average state gas taxes in January 2022 from the American Petroleum Institute

 Already built into the price of a gallon of gas is the federal government tax of 18.4 cents. Each state also adds an excise tax. State-levied taxes and fees can account for anywhere from roughly 5% to more than 20% of the total cost of gas. (Note that taxes on diesel fuel are higher than those on gasoline in most states.) Federal and state governments have directed gasoline taxes to fund road construction and repair. 

Click here to see the states with the highest gas prices

The price of gasoline has been a sore spot for inflation-strapped consumers. From December 2020 to December 2021, the energy index portion of the Consumer Price Index leaped 29.3%, boosting the overall index by 7%, the  largest 12-month increase since the period ending June 1982. (No matter how pricey, gas is still a bargain in the U.S. compared to most other places. These are the countries with the most expensive gas last summer.) 

For motorists in California, who pay some of the highest gas prices in the nation, some relief might be on the way. California taxes gasoline at 68.2 cents per gallon, and that levy is scheduled to increase on July 1 because of inflation. However, Gov. Gavin Newsom wants to stop that hike, at least for this year, because the state is running a projected budget surplus of $45.7 billion, lifted by a massive increase in tax collections.

To determine the highest and lowest gas taxes in every state, 24/7 Wall St. reviewed data on average state gas taxes in January 2022 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 the AAA. Prices are current as of Jan. 14, 2021. Annual vehicle miles traveled per driver was calculated using data on total vehicle miles traveled in 2020 from the Federal Highway Administration and an estimate of the number of licensed drivers in 2020 based on FHWA data for the number of licensed drivers in 2019 and 2020 population data from the U.S. Census Bureau.

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