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Policy

Motor Fuels Taxes

States and the federal government levy taxes on transportation fuels, primarily gasoline and diesel fuel delivered to the consumer but state taxes and fees are not uniform across all states. Where does your state fall?


Motor Fuels Taxes

Different transportation fuels power different vehicles and the tax treatment of these fuels also differs. At the federal level, diesel tax revenue makes up 40 percent of all motor fuel taxes and this proportion has not changes much over the last ten years.

States and the federal government levy taxes on transportation fuels, primarily gasoline and diesel fuel. These motor fuels in large part pay for transportation infrastructure projects including routine maintenance of roads, highways, bridges, tunnels and many other pieces of transportation infrastructure. The tax treatment of both fuels is much different as are the uses of the fuels. Gasoline is primarily the fuel for passenger vehicles. Over 95 percent of cars and light trucks are powered by gasoline. Diesel fuel is primarily the fuel of work. Three out of every four commercial vehicles are powered by diesel fuel while the largest of these trucks, Class 8 vehicles, are almost exclusively powered by diesel.

Federal Excise Tax

Today, federal taxes on motor fuels are levied on the gallons delivered to the consumer. As the use of motor fuels is different so too are the tax rates. Today, the federal tax rate on diesel is 6 cents higher ($0.244/gallon) than gasoline ($0.1844/gallon) in large part to account for the greater weight of commercial vehicles and “wear and tear” imposed on transportation infrastructure by commercial vehicles.

According to the Federal Highways Administration, about 40 percent of motor fuels taxes is derived from the sale of diesel fuel and other motor fuels such as natural gas and propane. Over the past ten years, federal motor fuels tax revenue has not changed much and diesel tax revenue consistently represents about 40 percent of total motor fuels tax revenue.

Federal_Gas_and_Diesel_Tax_Revenue

State Excise Tax

States and sometimes municipalities and counties, also levy additional motor fuels taxes. These taxes and fees are not uniform across all states and sometimes include statewide or regional sales taxes or other fees on the distribution of fuels.  On average, state and federal taxes on diesel exceeds state and federal taxes on gasoline.

Fuel-Tax-Info

California is the state that has the largest discrepancy between gasoline and diesel with diesel consumers spending 34 cents more per gallon of diesel in tax than gasoline. Florida is home to the smallest discrepancy with diesel consumers pay 1 cent less in total motor fuels taxes than gasoline consumers.

Diesel-Motor-Fuels-Tax-Chart

State

Total Taxes on Diesel 
(cents per gallon)

Total Taxes on Gasoline 
(cents per gallon)

California

106.11

71.89

Pennsylvania

99.50

77.10

Arizona

51.40

37.40

New Jersey

68.60

55.50

Indiana

72.40

60.30

New Mexico

47.28

37.28

Illinois

63.56

53.62

Virginia

50.49

40.80

Georgia

59.19

49.99

Hawaii

73.00

64.43

Connecticut

66.10

57.70

Iowa

56.90

48.90

Kansas

50.43

42.43

Vermont

56.40

49.12

Maine

55.61

48.41

Arkansas

47.20

40.20

Alabama

46.29

39.31

Michigan

67.68

60.78

Maryland

58.95

52.20

Montana

56.90

50.65

Alaska

36.77

30.70

District of Columbia

47.90

41.90

Idaho

57.40

51.40

Louisiana

44.41

38.41

Massachusetts

50.94

44.94

Minnesota

53.00

47.00

New Hampshire

48.23

42.23

North Carolina

59.75

53.75

North Dakota

47.40

41.40

Ohio

52.41

46.41

Rhode Island

58.40

52.40

South Carolina

45.15

39.15

South Dakota

54.40

48.40

Texas

44.40

38.40

Utah

53.81

47.81

Washington

73.80

67.80

West Virginia

60.10

54.10

Wisconsin

57.30

51.30

Wyoming

48.40

42.40

Missouri

41.70

35.75

Mississippi

42.80

37.19

New York

68.14

62.70

Nebraska

53.10

47.70

Oregon

60.41

55.17

Delaware

46.40

41.40

Colorado

44.90

40.40

Kentucky

47.40

44.40

Oklahoma

38.40

35.40

Tennessee

46.80

43.80

Nevada

52.96

51.92

Florida

58.77

59.99

Source: API, Motor Fuels Taxes (March 2018)

Learn More:

How are Motor Fuels Taxes Collected? https://www.fhwa.dot.gov/motorfuel/faqs.htm

What is the price difference between gasoline and diesel? https://www.eia.gov/petroleum/gasdiesel/

What is the difference between gasoline and diesel? https://www.eia.gov/energyexplained/index.cfm?page=diesel_home#tab2

How are fees and taxes assessed in my state? http://www.api.org/~/media/Files/Statistics/StateMotorFuel-OnePagers-Jan-18.pdf

 

 

 

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