Gasoline Tax Rates Just Went Up in 7 States


July 17, 2018


On July 1st a total of seven states increased their motor vehicle fuels taxes.


With the increase of 3 cents for gasoline and 6 cents for diesel, Oklahoma now has state rates identical to those in Texas – 20 cents per gallon for gasoline and for diesel.  Combined with the federal gas tax of 18.4 cents the rate on gasoline in both states is 38.4 cents a gallon.  In Texas, however, 5 cents of the total (25% of the state portion) is constitutionally dedicated to fund public education.


Texas last raised motor fuels taxes in 1991.  Texas is now one of only six states that have not increased gasoline and diesel tax levels in the past 25 years.  Arizona, New Mexico, Mississippi and Missouri have rates close to but lower than Texas.  Missouri voters will decide on a proposed 10 cent increase in November.


Texas continues to put off dealing with the long decline in the buying power of the fuels tax.  Twenty-seven states have increased fuel taxes in the past five years as state lawmakers deal with the impacts of highway maintenance and new construction cost inflation and the increasing gas mileage efficiency of the nation’s fleet of cars and trucks.  Based on Federal Highway Administration data, highway construction costs nationwide are up 66% since 2000.


Gas and diesel rates in South Carolina went up 2 cents a gallon in July as the second increment in a six-part increase that will eventually result in a total additional rate of 12 cents per gallon.

Indiana’s gasoline tax just went up 1.8 cents and the diesel tax increased 1 cent.  Both rates are now updated annually to keep pace with inflation and the rate of personal income growth in the state.


In Maryland gas and diesel rates just went up 1.5 cents per gallon based on a formula adopted in 2013 which ties the rates to increases in the rate of inflation and in the price of fuels.


Tennessee registered a 1 cent increase on gasoline and a 3 cent increase on diesel this summer.  The state is in the process of phasing in a 6 cent gasoline tax and a 10 cent diesel increase passed last year.


Based on a formula that links the gasoline tax to the price of the fuel, the tax rate in Vermont increased in July by 0.42 cents while the diesel rate is unchanged.


The latest rate increase in Iowa of 0.2 cents per gallon applies only to fuels that are not blended with ethanol – meaning that most of the fuel sold in the state did not see an increase.


The July 2018 American Petroleum Institute map (below) charting total current gasoline tax rates in each state shows that Pennsylvania continues to have the nation’s highest state tax rate at of 58.7 cents (77.1 total), almost three times the Texas-Oklahoma rate of 20 cents. The median state tax rate per gallon among all 50 states is 29 cents.


JULY 2, 2018 MAP