California leads with the highest state gas tax

California has the highest state gas tax in the country at 68.93 cents per gallon as of early 2024. This rate includes both the base excise tax and a variable component tied to crude oil prices, which means it shifts month to month. The exact amount you pay at the pump depends on when you fill up and which fuel grade you choose.

Washington State comes in second at around 49.95 cents per gallon, followed by Illinois at 50.2 cents. These three states are significantly higher than the national average of roughly 27 cents per gallon in state taxes alone. When you add federal tax of 18.4 cents per gallon, your total tax burden at the pump varies dramatically by location.

The reason California's tax is so much higher than others has to do with how the state structures it. Rather than a fixed cents-per-gallon rate, California uses a percentage-based system on the wholesale price of fuel. When oil prices rise, so does the tax. When prices fall, the tax falls with it. This makes California's rate volatile in ways that fixed-rate states are not.

Key Takeaways

  • California's gas tax of roughly 69 cents per gallon is the highest in the nation and changes monthly based on crude oil prices.
  • Washington and Illinois follow California with state taxes around 50 cents per gallon, while most states charge between 20 and 35 cents.
  • State gas taxes fund road maintenance and infrastructure projects, so higher taxes often reflect higher spending on transportation.
  • Your total tax at the pump includes both state tax and the federal excise tax of 18.4 cents per gallon.

Why gas taxes vary so much between states

Each state sets its own gas tax rate independently. Some states use a fixed amount per gallon — for example, Pennsylvania charges 58.7 cents per gallon, a number that stays the same until the legislature votes to change it. Other states tie their tax to the price of fuel itself, the way California does, so the rate moves with market conditions.

States also differ in what they do with the money. Most use gas tax revenue for road repair, bridge maintenance, and public transit. A state that invests heavily in highways and transit infrastructure often has a higher gas tax to fund that work. States with less developed transportation systems or lower population density may charge less because they have fewer roads to maintain.

Some states also add sales tax on top of the excise tax, which increases the total you pay. This layering means two states with the same per-gallon excise tax can have different final prices at the pump. The total tax you pay is always the sum of the state excise tax, any state sales tax, and the federal excise tax.

States with the lowest gas taxes

On the opposite end, Alaska and Mississippi have among the lowest state gas taxes, both around 14 to 15 cents per gallon. Wyoming, South Carolina, and Georgia also fall below 20 cents per gallon. These lower rates reflect both the political choices of those states and, in some cases, lower transportation infrastructure spending.

Even in low-tax states, you still pay the federal tax of 18.4 cents per gallon, so the absolute lowest total tax you can pay anywhere in the country is around 32 to 33 cents per gallon. This means a driver in Alaska pays less than half the state tax that a driver in California pays, though the federal portion is the same.

How California's variable tax system works

California's gas tax is unusual because it is not a fixed number. The state charges a percentage of the wholesale price of gasoline, which means the tax itself fluctuates. When crude oil prices spike, California's tax goes up. When prices drop, the tax drops too. This system was designed to keep the tax revenue stable as a percentage of fuel costs, but it creates month-to-month variation that drivers notice.

In practice, this means California drivers might pay 65 cents per gallon in state tax one month and 72 cents the next, depending entirely on what happened to oil prices. Fixed-rate states do not have this problem — their tax stays the same regardless of market conditions. The trade-off is that California's variable system keeps pace with inflation and fuel costs automatically, while fixed-rate states eventually fall behind as prices rise.

What your gas tax actually pays for

Gas taxes are not general revenue — they are supposed to fund transportation. In most states, gas tax money goes into a dedicated fund that pays for road resurfacing, pothole repair, bridge inspection, and sometimes public transit. When a state has a high gas tax, it usually means that state is spending more on these projects than a low-tax state.

California uses its gas tax revenue for highway maintenance, local road repair, and transit programs. The state also dedicates a portion to environmental programs related to transportation. Washington State uses its gas tax for similar purposes — roads, bridges, and transit. The money does not go into the general budget; it is earmarked for transportation only.

This is why gas taxes are often politically contentious. Drivers see the tax as a direct cost, while transportation officials argue that the money is necessary to maintain roads that would otherwise deteriorate. States with aging infrastructure or heavy traffic often have higher taxes because the maintenance costs are genuinely higher.

How gas taxes have changed over time

Most state gas taxes have not increased in years, even though road maintenance costs have risen. The federal gas tax has been stuck at 18.4 cents per gallon since 1993, which means it has lost purchasing power to inflation. Some states have raised their taxes recently — California adjusted its system in 2017, and several states have increased fixed rates in the past five years — but many have not.

This creates a funding gap. Roads cost more to fix than they did ten years ago, but the tax revenue has not kept pace. Some states have responded by raising taxes; others have cut maintenance or sought alternative funding through tolls or public-private partnerships. The result is that gas tax rates across the country are increasingly divergent, with some states raising rates while others hold steady.

Frequently Asked Questions

Does the federal gas tax explore on top of the state tax?

Yes. The federal excise tax of 18.4 cents per gallon applies in every state, and your state tax is added on top of that. So if you live in a state with a 30-cent state tax, you pay 48.4 cents per gallon in excise taxes alone, before any sales tax.

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

California uses a percentage-based system tied to crude oil prices rather than a fixed per-gallon rate. This means the tax rises and falls with fuel costs. The state also has strict environmental regulations on fuel, which adds cost, and it spends heavily on transportation infrastructure and transit programs.

Do electric vehicles pay gas tax?

No, electric vehicles do not pay gas tax because they do not use gasoline. Some states are exploring alternative fees for electric vehicle owners to fund road maintenance, but these are separate from gas taxes and vary by state.

Can I avoid high gas taxes by buying fuel in a neighboring state?

The tax is charged where you buy the fuel, not where you live. If you buy gas in a low-tax state and drive home to a high-tax state, you pay the low-tax state's rate for that purchase. However, the savings are usually small unless you live near a border and buy fuel regularly across it.

Will gas taxes increase in the future?

That depends on each state's legislature. Some states are raising taxes to fund infrastructure; others are holding steady. The federal tax has not increased since 1993, and there is no current federal proposal to raise it, though that could change.