California has the highest state gas tax at 68.93 cents per gallon as of early 2024
California's gas tax is the single highest in the nation, made up of a base excise tax plus additional fees tied to inflation and vehicle sales taxes. The state adjusts its tax quarterly based on a formula that accounts for the cost of living, which means the exact rate shifts throughout the year. Washington State comes in second at around 49.4 cents per gallon, followed by Illinois at 38.27 cents per gallon.
These rates are state taxes only and do not include the federal gas tax of 18.4 cents per gallon that applies everywhere. When you fill up, you pay both the state tax and the federal tax, so your total tax burden depends on where you live. A gallon of gas in California carries roughly 87 cents in combined state and federal tax, while the same gallon in a low-tax state like Mississippi (at 18.79 cents state tax) carries about 37 cents total.
Key Takeaways
- California's gas tax of 68.93 cents per gallon is the highest in the United States and adjusts quarterly based on inflation.
- Washington State (49.4 cents) and Illinois (38.27 cents) rank second and third, but all states also charge the federal tax of 18.4 cents per gallon on top of their state rate.
- Gas tax rates vary because states fund road maintenance and transportation projects differently, and some states tie their rates to inflation or vehicle sales.
- The total tax you pay at the pump includes both state and federal components, so comparing states requires adding both numbers together.
Why California's tax is so much higher than other states
California's gas tax funds the state's road repair program and environmental initiatives, but the quarterly adjustment mechanism is what pushes it so far ahead of other states. The state legislature passed a law in 2017 that ties the excise tax to inflation, meaning it rises automatically each quarter without requiring a new vote. This design was meant to keep the road fund stable as construction costs climb, but it also means California's tax grows faster than most other states' taxes.
The state also collects sales tax on gasoline, which adds another layer on top of the excise tax. When you buy a gallon at $3.50, you pay sales tax on that $3.50 price, and the sales tax rate varies by county. This combination of excise tax plus sales tax plus quarterly adjustments creates the nation's highest pump price for the tax component alone.
How the top five states compare
| State | State Gas Tax (per gallon) | Total with Federal Tax |
|---|---|---|
| California | 68.93¢ | 87.33¢ |
| Washington | 49.4¢ | 67.8¢ |
| Illinois | 38.27¢ | 56.67¢ |
| Indiana | 38.1¢ | 56.5¢ |
| New Jersey | 37.5¢ | 55.9¢ |
These five states represent the upper tier of gas taxation in the country. California stands alone at the top, but Washington's rate is also significantly higher than the third-place states. The difference between California and Washington is roughly 20 cents per gallon, which adds up quickly for drivers who fill up regularly.
The gap between the second and third-place states is much smaller than the gap between first and second. Washington's 49.4 cents is about 11 cents higher than Illinois's 38.27 cents, showing that California's position is genuinely exceptional rather than part of a gradual ranking.
Why states set different gas tax rates
Each state funds its roads and transportation infrastructure through its own budget decisions, and gas tax is one of the main revenue sources. States with older road systems, higher construction costs, or more ambitious maintenance programs tend to charge higher taxes. California, for example, has extensive highway systems and faces high labor and material costs, which drives up the need for tax revenue.
Some states also use gas tax revenue for public transit, environmental programs, or debt repayment from past infrastructure bonds. Washington State, which ranks second nationally, dedicates gas tax money to both highway maintenance and public transportation projects. The tax rate you see at the pump reflects each state's choices about how much to invest in transportation and how much of that cost to pass on to drivers.
States with the lowest gas taxes
Mississippi has the lowest state gas tax at 18.79 cents per gallon, followed by Alaska at 19.75 cents and South Carolina at 20.75 cents. These low-tax states still collect the federal 18.4 cents per gallon, so drivers there pay roughly 37 to 38 cents total in gas tax. The difference between filling up in Mississippi and California is substantial—roughly 50 cents per gallon in state tax alone.
Low-tax states often have different funding models for road maintenance. Some rely more heavily on general tax revenue or tolls, while others have lower population density and therefore lower overall road maintenance costs. Alaska's low tax reflects the state's smaller population and different transportation priorities, while Mississippi's reflects a policy choice to keep the pump price low.
How gas tax rates change over time
Most states adjust their gas tax rates only when the legislature votes to change them, which happens infrequently. California is unusual because its rate adjusts automatically every quarter. Some states have frozen their gas tax rates for years, meaning the actual purchasing power of the tax shrinks as inflation rises and construction costs climb.
When a state does raise its gas tax, it typically happens through a legislative vote and takes effect on a specific date. Washington State, for example, raised its gas tax in 2015 and again in 2022. These changes are often controversial because drivers notice them when ready at the pump, even though the revenue goes toward road repairs and maintenance that drivers depend on.
Frequently Asked Questions
Does the federal gas tax explore in every state?
Yes. The federal tax of 18.4 cents per gallon applies everywhere in the United States. Every state's gas tax is in addition to this federal tax, not instead of it. When you see a state's gas tax rate quoted, always add 18.4 cents to find your total tax burden at the pump.
Why is California's gas tax so much higher than other states?
California's tax is higher because it adjusts automatically every quarter based on inflation, and the state also collects sales tax on gasoline. Most other states only adjust their gas tax when the legislature votes to do so, which happens rarely. The quarterly adjustment mechanism means California's tax grows steadily without requiring new legislation.
Do gas tax rates include sales tax?
It depends on the state. California's quoted gas tax rate is the excise tax only; sales tax is added on top of that. Other states may or may not collect sales tax on gasoline. The total tax you pay includes both the state excise tax and any applicable sales tax, plus the federal tax.
Can I find out my state's exact gas tax rate?
Yes. Your state's Department of Revenue or Department of Transportation publishes the current gas tax rate. Rates can change quarterly in some states and annually in others, so checking your state's official website gives you the most current figure. Gas tax rates are public information and updated regularly.
What happens to the money from gas taxes?
Gas tax revenue goes into state transportation funds that pay for road repair, maintenance, and construction. Some states also use gas tax money for public transit, environmental programs, or to repay bonds issued for past infrastructure projects. The specific uses vary by state and are determined by each state's legislature.