California has the highest state fuel tax at 68.2 cents per gallon as of 2024

California's fuel tax is made up of two parts: a base excise tax of 54.36 cents per gallon, plus an additional sales tax on fuel that varies by county but averages around 13.86 cents per gallon. This combined rate is the highest in the nation. The state uses fuel tax revenue for road maintenance, bridge repairs, and public transit projects.

The second-highest state fuel tax belongs to Washington at 49.4 cents per gallon, followed by Oregon at 38 cents per gallon. These three states are significantly ahead of the national average, which sits around 28 cents per gallon when combining state and federal taxes. The difference between California and the national average means a driver filling a 15-gallon tank pays roughly $6 more in California than in a state with the average rate.

Key Takeaways

  • California's fuel tax of 68.2 cents per gallon includes both an excise tax and a sales tax component that varies by location.
  • Washington and Oregon rank second and third nationally, but their rates are still 18 to 30 cents per gallon lower than California's.
  • Fuel tax rates change throughout the year in some states because they are tied to inflation or sales tax rates.
  • The federal fuel tax of 18.4 cents per gallon applies everywhere and is separate from state taxes.

Why fuel taxes vary so much between states

States set their own fuel tax rates based on their transportation funding needs and political decisions about how to pay for road work. A state with extensive highway systems, aging bridges, or high construction costs may charge more than a state with less infrastructure demand. California, for example, has 170,000 miles of public roads and faces significant earthquake-related repairs, which drives higher tax revenue needs.

Some states also tie their fuel tax to inflation, meaning the rate automatically increases each year. Washington and Oregon both use this method, so their rates creep upward annually. Other states, like Texas and Florida, keep their rates fixed and only raise them through legislative action, which happens less frequently. This is why the gap between the highest and lowest state fuel taxes has grown wider over the past decade.

How fuel tax is calculated at the pump

When you fill up, you pay three separate fuel taxes: the federal excise tax, your state's excise tax, and any sales tax that applies to fuel in your state. The federal tax is always 18.4 cents per gallon for gasoline. The state excise tax is a fixed amount per gallon set by state law. Sales tax, where it applies to fuel, is calculated as a percentage of the pump price and varies by county or city.

California's system is more complex than most because it applies sales tax to fuel, whereas many states exempt fuel from sales tax entirely. This is why California's total rate (68.2 cents) looks so much higher than Washington's (49.4 cents) even though Washington's excise tax alone is 49.4 cents. A driver in Washington pays the federal 18.4 cents plus the state 49.4 cents, totaling 67.8 cents before any local sales tax. In practice, the actual difference at the pump depends on where you live within each state.

States with the lowest fuel taxes

Alaska has the lowest state fuel tax at 14.7 cents per gallon, though the state's remote location and limited road network mean fuel prices are often higher overall due to transportation costs. Hawaii charges 16 cents per gallon in state tax. Wyoming, Mississippi, and South Carolina all charge between 24 and 26 cents per gallon, making them among the cheapest in the continental United States.

Even in low-tax states, drivers still pay the federal 18.4 cents per gallon, so the absolute lowest total state plus federal rate is around 33 cents per gallon in Alaska. This is still 35 cents per gallon less than California's rate. A driver in Alaska filling a 15-gallon tank pays roughly $5.25 in combined state and federal fuel tax, compared to $10.23 in California.

When and how fuel tax rates change

Most states review their fuel tax rates annually or every few years. Some states, like Washington and Oregon, have automatic adjustment mechanisms tied to inflation or fuel prices, so rates change without new legislation. Other states require lawmakers to vote on a rate increase, which happens less often. California's rate changes periodically when the state legislature passes new transportation funding bills.

Fuel tax rates can also change mid-year in states that use inflation adjustments. Washington, for example, adjusts its rate quarterly based on the Consumer Price Index. This means the rate you pay in January may be different from the rate in July. If you are planning a road trip or comparing fuel costs between states, check the current rates for your specific travel dates, as published rates can shift.

How fuel tax revenue is used

Every state dedicates fuel tax revenue to transportation infrastructure, but the breakdown varies. Most states use the money for highway maintenance, pothole repair, and bridge work. Some states allocate a portion to public transit, electric vehicle charging stations, or active transportation projects like bike lanes. California dedicates fuel tax revenue to the State Highway System, local roads, and transit programs.

Federal fuel tax revenue goes into the Highway Trust Fund, which distributes money back to states for road projects. This means you are funding both state and federal transportation work with every gallon you buy. The total amount of fuel tax you pay over a year depends on how much you drive and which state you live in, but the money stays within the transportation system rather than going to general state budgets.

Frequently Asked Questions

Do I pay fuel tax in every state I drive through?

Yes. You pay the fuel tax of the state where you purchase the fuel, not where you live or where you are driving. If you fill up in California, you pay California's 68.2 cents per gallon regardless of your home state. If you cross into Nevada and fill up there, you pay Nevada's rate of 35.84 cents per gallon.

Is fuel tax the same price everywhere in a state?

The state excise tax is the same statewide, but the total tax you pay can vary because of local sales tax differences. California's excise tax is uniform, but the sales tax component ranges from about 7.25% to over 10% depending on your county. This means two California drivers in different counties pay slightly different total fuel taxes on the same gallon.

Why is California's fuel tax so much higher than other states?

California applies sales tax to fuel in addition to an excise tax, whereas most states use only an excise tax. California also has higher transportation infrastructure costs due to its size, population density, and earthquake-related maintenance needs. The state legislature has also passed multiple transportation funding bills over the past decade that increased fuel taxes.

Does the federal fuel tax go to my state?

The federal fuel tax goes into the Highway Trust Fund, which distributes money to all states based on a formula that considers population, road miles, and other factors. Your state receives federal highway funding, but not necessarily the exact amount of federal fuel tax you paid. Some states receive more federal funding than they contribute in federal fuel tax, while others receive less.

Will fuel taxes increase in the future?

That depends on the state. States with automatic inflation adjustments will see rates rise each year. States that require legislative action may see rates stay the same for years, then jump when lawmakers pass a new bill. The federal fuel tax has remained at 18.4 cents per gallon since 1993 and has not increased since then.