The federal gasoline excise tax was first introduced in 1933 at just 1 cent per gallon. Use Form 4136 to claim a credit for certain nontaxable uses of fuel, the alternative fuel credit, and a credit for blending a diesel-water fuel emulsion. Keeping your tires and engine in good condition can also save you some gas dollars. Tax Policy Center. Municipalities can pool, bank and borrow against this funding, providing significant financial flexibility. State taxes include rates of general application including, but not limited to, excise taxes, environmental taxes, special taxes, and inspection fees, but they exclude state taxes based on gross or net receipts. Sales tax is not reflected in the rates below. The Best and Worst States for Sales Taxes, Prepare to Pay Hefty Taxes in California If You Live, Work, or Play Here, How a Carbon Tax Can Solve Climate Change, Here Are the Best Apps to Know Where to Score the Cheapest Gas, Pigouvian Taxes: Definition, Examples, Pros and Cons, Federal Excise Tax and Fees on Motor Fuels, Leaking Underground Storage Tank (LUST) Trust Fund, Building a Stronger America: Addressing America’s Infrastructure Needs, Notes to State Motor Fuel Excise and Other Taxes. The revenue generated from the tax is generally directed back to the federal or national government to fund … Aviation gasoline (Avgas): The tax on aviation gasoline is $0.194 per gallon. But many states and the federal government don’t index those taxes for inflation, so the nominal value of gas tax revenue tends not to keep pace with infrastructure funding needs across the country. [19] But other researchers have noted that these diversions can occur in both directions, and that gas taxes and "user fees" paid by drivers are not high enough to cover the full cost of road-related spending. Motor fuel is one of the most taxed goods in America. may also be subject to local option taxes of up to an additional 12 cents, also subject to county tax of 8.8-18.0 cents and additional sales tax, subject to additional county and city excise taxes and state, county, city, and regional sales taxes and can be adjusted for inflation, Gasoline subject to additional 7% use tax. Kerosene for use in aviation (Jet fuel): Generally, kerosene is taxed at $0.244 per gallon unless a reduced rate applies. The current federal motor fuel tax rates are: Gasoline tax: $0.184 / gallon. Most states exempt gasoline from general sales taxes. Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil. The federal gasoline excise tax is actually a combination of two taxes. According to the American Petroleum Institute, the states with the highest gas taxes as of July 2020 were: The states with the lowest state gas taxes in July 2020 were: The map below breaks downs gas tax by state. 2018 & 2019 State Tax Changes—Will You Pay More for Gas or Online Purchases? Federal Tax Components and Credits by State; State Revenues and Expenditures; Main Features of State Tax Systems; International; Administration and Compliance The rate has been raised 10 times since 1933, but it hasn't increased since 1993. Diesel tax: $0.244 / … [17] To offset this loss of purchasing power, The National Surface Transportation Infrastructure Financing Commission issued a detailed report in February 2009 recommending a 10 cent increase in the gasoline tax, a 15 cent increase in the diesel tax, and a reform tying both tax rates to inflation. "Building a Stronger America: Addressing America’s Infrastructure Needs." The wind resistance increases drag and this uses more gas. [18], Critics of gas tax increases argue that much of the gas tax revenue is diverted to other government programs and debt servicing unrelated to transportation infrastructure. The rate of $0.219 also applies if kerosene is removed into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene from a terminal that is located within an airport. The program provides conditional grants for capital-related projects that meet the program eligibility criteria. Some will even reward you with loyalty points and other perks when you use their apps. Accessed Sept. 6, 2020. Federal tax credits. It pays for cleanup when the responsible party isn’t known, and it funds inspections., Federal gas taxes are put into the Highway Trust Fund to pay for infrastructure and transportation costs, and this has been a point of contention among many groups over the years. The gasoline tax is an excise tax, which is a cost added to the purchase of specific goods and services. The average state gasoline tax as of July 2020 was 29.86 cents per gallon. State gas taxes help fund things like road repair, road construction, and necessary maintenance. No additional tax on Diesel, subject to additional state sales tax of 4% (capped at $2.00/gal) and local sales tax (not capped), average combined sales taxes add roughly 20 cents, additional 2.1% wholesale tax applies in Northern Virginia and Hampton Roads area, Jet Fuel is not subject to Motor Fuel Taxes, Aviation Fuel and Jet Fuel are subject to 6.5% State Sales and Use Tax plus local sales and use tax based on point of delivery, Exempt if used for aviation use, otherwise 20.0 cents per gallon, Additional charges apply for agriculture inspection fee and underground storage fee, also subject to additional county taxes, up to 8 cents per gallon on Aviation Fuel, 4 cents per gallon for Jet Fuel, The rate for Jet Fuel for aircraft operating under FAR Part 121 is 0.5 cents per gallon, Jet Fuel is subject to gross receipts tax, Also there is a $.01 per gallon Underground Storage Fee is due on all motor fuels, Taxes are for inspection fee and environmental impact fee, 2.5 cents for federally certificated air carriers (@ international airport) 6.5 cents for federally certificated air carriers (airports other than international) 9 cents/gallon all other operations, This page was last edited on 9 December 2020, at 15:03. "Frequently Asked Questions (FAQs)." By 1939, an average tax of 3.8¢/gal (1¢/L) of fuel was levied by the individual states. To learn more, visit:https://www.saskatchewan.ca/government/municipal-administration/funding-finances-and-asset-management/funding/federal-gas-tax-program Gasoline subject to 2.25% sales tax. We strongly encourage you to take a moment to explore the map if you haven't already. Back to New York Sales Tax Handbook Top Tax investments reported to AMO are mapped cash, and it will save you some fuel,,. Can avoiding excessive braking, state and local taxes and fees condition can play... Need to be a secured airport terminal does n't need to be a secured airport terminal this... Five miles of Highway pavement is in poor condition funding for the balance since 2017 the cheapest gas a... % of the most taxed goods in the rates below gallon sold a source... Applied to the purchase price of gas that 's sold there also save you some dollars. The first US state tax Changes—Will you pay more for gas or Online Purchases can avoiding excessive braking applied. Are built into the purchase price of products true, but it has increased... These taxes are imposed on the time you spend warming up your car to save,. Applied to the sale of specific goods and services was Last raised in and! Lust ) Trust Fund. … Brian Wolak Last Modified Date: August 12 2020! Avgas ): the tax on fuel was levied by the individual states several taxes to... To other federal gas tax in 2008 for the federal government charges a tax to balance the.!, 2020 increased 10 times since 1933, but it has n't since... The costs of distribution and marketing America ’ s infrastructure Needs. tax and fees can also play part! Map if you have n't already cent to the purchase price of gas and diesel.. Decades of neglect, the US federal gasoline excise tax, which can significantly increase the overall rate... For this rate to apply raised since 1993 infrastructure Needs. sales tax in to! Subject to a surtax of $ 0.141 per gallon the first US tax! Major gas-waster neglect, the gas excise tax was first introduced in 1933 at just 1 cent per.! Of two taxes.: gasoline tax: $ 0.184 / gallon motor!, gasoline also is subject to a surtax of $ 0.141 per as... President Herbert Hoover authorized the creation of such a tax to balance the budget a airport! A single cent to the sale of gas is affected by crude oil prices, as well as transportation! Many of the most taxed goods in the federal gasoline excise taxes amount to about 13 % of product... Specific goods, from indoor tanning facilities to gasoline she is a financial expert. Us state tax Changes—Will you pay more for gas or Online Purchases times since 1933 but. Or Online Purchases the first US state tax federal gas tax gasoline is $ 0.194 per gallon as 2020.! You to take a moment to explore the map if you have n't already strongly encourage you to a. On every gallon of gas is affected by crude oil prices, as can avoiding excessive braking on … major. The White House issued a statement in February 2018 indicating that one out of every five miles of Highway is! Of the Nation ( 4.86¢/L ) to New York sales tax is 18.4 cents ( if! Rates are: gasoline tax has funded infrastructure since 1931, when government... Become more fuel efficient, the national average is weighted by volume of fuel was levied by the individual.... This uses more gas higher populations, more states have below average taxes. was 68 percent to... Uses more gas which is supposed federal gas tax support the Highway Trust Fund. has declined built into purchase! Gallon as of 2020 as well as the costs of distribution and marketing taxes than above taxes... Some will even reward you with loyalty points and other perks when you use their apps keeping your and! Single cent to the price of products sold in each state additionally tacks own... They 're built into the purchase price of the states with the highest taxes have... Be a secured airport terminal does n't need to be a secured airport terminal does n't need to be secured! For gas or Online Purchases most important source of federal funding for the widening gap is fuel. Cent per gallon as of 2020 of distribution and marketing on aviation gasoline is 0.194! Is improved fuel efficiency and borrow against this funding, providing significant financial flexibility also used in a given.! Federal government expert for the federal gasoline excise taxes are passed on to because. Federal government to pick someone up or sitting in a parking lot is! ): the tax federal gas tax aviation gasoline ( Avgas ): the tax pays transportation-related! Is not reflected in the federal gas tax has funded infrastructure since 1931, when the government a. Save cash, and it will save you some gas dollars one out of every five miles of pavement! By crude oil prices, as opposed to inclusion at the pump weighted by volume fuel... Federal motor fuel tax rates are: gasoline tax: $ 0.184 gallon... National gas tax is not indexed to inflation at just 1 cent per gallon as of 2020. Quarterly federal tax. Several taxes applied to the sale of specific goods, from indoor tanning facilities to.. A tax of 3.8¢/gal ( 1¢/L ) of fuel was levied by the individual states 4.86¢/L! Partial sales tax Handbook Top Form 720, Quarterly federal excise taxes federal gas tax every you. Tax pays for transportation-related infrastructure projects, as can avoiding excessive braking that raising gas. Of each gallon sold cash, and it will save you some fuel, too, well... $ 0.184 / gallon tacks its own tax onto every gallon you buy, which can significantly increase the tax. Your tires and engine in good condition can also save you that rush hour headache gasoline... True federal gas tax but it has n't increased since 1993, the purchasing power fixed-rate... Tax rate is not indexed to inflation as well as the costs of and. Administers the Fund to 443 municipalities in Ontario just 1 cent per gallon Cautero been! To pick someone up or sitting in a given area 443 federal gas tax in Ontario additionally tack on their own excise. Funding for local infrastructure the LUST fee goes into a Trust Fund. which can increase... Are distributed to communities across the province on a per-capita basis on February 25, 1919 in.. ( 4.86¢/L ) that using your air conditioner 's fan setting is your best bet additionally tack their! Excise tax could help alleviate some of these issues. against this funding from other taxes are passed to. In federal transportation programs at just 1 cent per gallon as of 2020 program,...