State Gas Tax
Every state levies its own motor fuel tax on top of the federal 18.4¢/gallon gasoline tax, with state rates ranging from a low of 8.3¢/gallon (Alaska) to a high of 77.9¢/gallon (California including cap-and-trade costs), making state gas taxes a significant and highly variable component of what drivers pay at the pump. Unlike the federal gas tax (unchanged since 1993), many states index their rates to inflation, fuel prices, or the consumer price index — meaning state gas tax rates change automatically each year. States use gas tax revenue primarily for their transportation trust funds, supplementing federal highway aid for road and bridge construction, public transit, and local transportation projects. The combined federal + state burden ranges from under 30¢/gallon in states like Alaska and New Mexico to over 90¢/gallon in California and Pennsylvania — a spread that contributes to significant regional price differences that aren't fully explained by crude oil costs or refining margins. Several states temporarily suspended their gas taxes during 2022's price spike (Maryland, Georgia, Connecticut) and have since reinstated them. State gas taxes are facing a long-term structural challenge: the rise of electric vehicles — which pay no gas tax — is eroding the tax base, prompting states to consider EV registration fees, road-user charges (vehicle miles traveled fees), and other mechanisms to maintain transportation funding as the fleet electrifies.
Current Law (2026)
Every state levies its own motor fuel tax in addition to the federal $0.184/gallon. Rates vary widely and are a major component of pump prices.
Combined Federal + State Rates (Selected States)
| State | State Gas Tax (est.) | Combined w/ Federal |
|---|---|---|
| PA | $0.584 | $0.768 |
| CA | $0.579 | $0.763 |
| WA | $0.494 | $0.678 |
| NJ | $0.425 | $0.609 |
| IL | $0.392 | $0.576 |
| NY | $0.338 | $0.522 |
| FL | $0.354 | $0.538 |
| TX | $0.20 | $0.384 |
| AK | $0.09 | $0.274 |
Rates include all state taxes, fees, and assessments. Many states have additional components (underground storage tank fees, environmental fees, sales tax on fuel).
How It Works
State motor fuel taxes vary in their rate structure: some states charge a fixed cents-per-gallon amount (the same approach as the federal 18.4¢/gallon tax), while others use a percentage-based (ad valorem) rate that rises automatically when pump prices increase. Some states use hybrid approaches combining a fixed floor with a variable component. In a fixed-rate state, a spike in crude prices doesn't change the state tax per gallon; in an ad valorem state, the same price spike adds tax revenue and increases the effective cost of driving. Diesel is taxed at higher rates than gasoline in most states, reflecting the heavier road wear from commercial trucks relative to passenger cars.
Approximately 20 states automatically adjust their gas tax rates annually — indexed to CPI, a state-specific construction cost index, or fuel prices — without requiring a legislative vote. Automatic indexing keeps transportation trust fund revenues growing in real terms without the political friction of a dedicated vote, unlike the federal gas tax (unchanged since 1993). States without automatic indexing may go decades between rate increases, allowing real purchasing power to erode and creating periodic pressure for large catch-up increases.
Electric vehicle registration surcharges have been enacted in more than 33 states — typically $50–$225/year at registration — to partially compensate for gas tax revenue lost as EVs displace gasoline vehicles. Plug-in hybrid fees are usually lower. These surcharges are a rough substitute: a flat $150/year fee on an EV driving 15,000 miles doesn't match what a comparable gasoline vehicle pays in annual fuel taxes, and rural high-mileage EV drivers are undercharged relative to their road use. Vehicle miles traveled (VMT) fee pilots in Oregon, Utah, and other states are testing the longer-term alternative to the per-gallon model.
How It Affects You
If you're calculating your annual fuel costs: State gas taxes range from under $0.10/gallon (Alaska) to over $0.60/gallon (California, Pennsylvania). The difference is meaningful at scale. A driver using 1,200 gallons/year pays roughly $700+ in state gas tax in Pennsylvania but under $150 in Alaska. For most drivers, gasoline's retail price is dominated by crude oil markets and refining margins — but state tax is the component you can actually observe and account for in your budget by where you fill up.
If you live near a state border: Cross-border refueling can be worth the trip. The Pennsylvania/New Jersey border is a classic example — NJ gas taxes are significantly lower than PA's, making fuel noticeably cheaper. Similar dynamics exist along MO/KS (Kansas City metro), IL/IN (Chicago suburbs), and VA/WV. If you regularly cross a state line, check the tax differential — a $0.20/gallon savings on a 15-gallon fill-up is $3 per visit, or $150+ annually for frequent fill-ups.
If you own an EV: Nearly all states have added or are adding EV-specific annual registration surcharges — typically $100-$225/year — as EVs avoid paying into state transportation funds through the gas tax. These fees offset some of the fuel savings, but even at $200/year, they're far less than the equivalent gas tax burden for a driver using 700+ gallons/year. Track your state's EV fee when calculating total ownership cost.
If your state is piloting a VMT tax: Several states (Oregon, Utah, Hawaii, Washington) are piloting vehicle miles traveled (VMT) taxes as a long-term replacement for the gas tax. Participation is currently voluntary in all pilot programs. Whether a per-mile charge costs you more or less than the current gas tax depends on your fuel efficiency: a driver getting 15 MPG pays significantly more per mile in gas tax than a 40 MPG hybrid driver. At Oregon's pilot rate of ~$0.019/mile, that's $190/10,000 miles — equivalent to a $0.285/gallon tax for a 15 MPG vehicle, but an effective $0.76/gallon for a 40 MPG hybrid. High-efficiency and EV drivers often pay less under VMT than under gas tax.
Implementing Regulations
State gas taxes are governed by state revenue codes. No federal CFR applies directly. 26 CFR Part 48 (§§ 48.4041-3 et seq.) governs federal motor fuel excise taxes that interact with state rates and highway trust fund distributions.
Pending Legislation
State gas tax proposals are active in nearly every legislature — increases for infrastructure funding, temporary suspensions for price relief, and VMT pilot programs are all common. See also Federal Highway System for how these revenues flow to road projects.
Recent Developments
- California and Pennsylvania remain the highest state gas tax states: California's gas tax ($0.579/gallon) and Pennsylvania's ($0.584/gallon) represent the top of the state rate spectrum. California's tax includes an automatic annual inflation adjustment — the rate increased January 1, 2026 per the CPI-based formula. California's combined state and local tax burden on fuel (including the cap-and-trade carbon price component, underground storage tank fee, and state sales tax on fuel) can add $0.70-$0.90/gallon above the federal rate, creating a total tax burden near $1.00/gallon on California gasoline.
- EV registration surcharges now law in 33+ states: As electric vehicle adoption grows, states have moved aggressively to replace lost gas tax revenue with EV-specific registration fees. Annual EV surcharges range from $50 (Mississippi) to $225 (Georgia), with most states in the $100-$150 range. Some states have tiered charges (plug-in hybrids pay less than fully electric). The "fairness" of EV surcharges relative to gas taxes is contested — on a per-mile basis, the annual surcharge often equals or exceeds what a typical EV driver would pay in gas taxes at average mileage.
- Several states suspended or reduced gas taxes for relief in 2022-2023 — most have lapsed: During the 2022 fuel price spike, California, Maryland, Connecticut, Georgia, Florida, New York, and other states temporarily suspended or reduced state gas taxes. Most of these relief measures have since expired. Maryland, which made its suspension most visible, saw pump price parity with neighboring states collapse when the suspension ended. State legislatures continue to debate whether gas tax relief is an effective tool — the evidence suggests consumers absorb most savings quickly in fuel demand increases.
- VMT pilots advancing toward policy implementation: More than a dozen states (OR, WA, CA, CO, UT, MN, and others) have conducted voluntary Vehicle Miles Traveled (VMT) fee pilots, where drivers pay a per-mile charge instead of or in addition to the gas tax. Oregon's OReGO program is the most mature. Federal funding through IIJA supports national pilot expansion. A VMT fee is the most logical long-term replacement for the gas tax as vehicle fleets electrify — but privacy concerns (GPS tracking requirements) and transition complexity have slowed political momentum.