The states with the highest gas tax rates right now
California, Washington, and Illinois currently have the highest state gas tax rates in the country, each charging between 68 and 70 cents per gallon on top of the federal tax of 18.4 cents. The exact ranking shifts slightly as states adjust their rates, but these three consistently occupy the top positions. Pennsylvania, Hawaii, and Indiana also rank in the top tier, each above 60 cents per gallon.
Gas tax rates are set by individual state legislatures and are not uniform across the country. Some states use a flat rate per gallon, while others use a percentage of the pump price, which means their effective tax rises and falls with fuel costs. A few states, like Oregon and Washington, have experimented with mileage-based fees as an alternative or supplement to traditional gas taxes.
The variation matters because a driver filling up in California pays substantially more in state tax than someone in a low-tax state like Mississippi or Alaska. Over the course of a year, this difference can add hundreds of dollars to a household's fuel costs.
Key Takeaways
- California, Washington, and Illinois have the highest state gas tax rates, each above 68 cents per gallon.
- Some states use a flat per-gallon rate while others use a percentage of the pump price, so the effective tax changes when fuel prices change.
- The lowest-tax states like Mississippi and Alaska charge less than 20 cents per gallon, creating a difference of 50 cents or more between high-tax and low-tax states.
- State gas taxes fund road maintenance and construction projects, so higher taxes generally mean more investment in local infrastructure.
How state gas taxes are structured
Most states charge a flat excise tax per gallon—a set number of cents added to every gallon sold, regardless of the pump price. This is the simplest method and is used by states like California, Pennsylvania, and Illinois. The tax is collected by fuel distributors and sent to the state.
A smaller number of states use a percentage-based tax, also called an ad valorem tax. Washington and Hawaii are examples. With this method, the tax is calculated as a percentage of the retail price at the pump. When gas prices rise, the tax collected per gallon rises automatically. When prices fall, so does the tax. This means the state's revenue from gas tax fluctuates with market conditions rather than remaining stable.
A few states, including Oregon and Washington, have begun piloting mileage-based fees as a potential replacement for gas tax. These programs track miles driven and charge a per-mile rate instead. The idea is to shift the burden from fuel consumption to actual road use, which would affect electric vehicle owners equally. These programs are still limited in scope and are not yet the primary funding mechanism in any state.
Why gas tax rates vary so much between states
State gas taxes are set by state legislatures and reflect different choices about how to fund road maintenance and construction. States with older infrastructure, higher traffic volumes, or more rural areas to maintain often have higher tax rates because they need more revenue for repairs and upkeep.
Political factors also play a role. Some states have not raised their gas tax in decades, even as inflation erodes the purchasing power of that tax. Other states have raised rates more recently to keep pace with rising construction costs. For example, California's gas tax has been adjusted multiple times over the past 20 years, while some low-tax states have kept their rates unchanged since the 1990s.
Population density matters too. States with sprawling rural areas and lower population density often have higher per-capita road maintenance costs, which can push tax rates up. Conversely, states with concentrated urban populations sometimes have lower rates because the cost is spread across more fuel purchases.
The lowest-tax and highest-tax states compared
| Category | Highest-Tax States | Lowest-Tax States |
|---|---|---|
| State tax rate | 68–70 cents per gallon | Less than 20 cents per gallon |
| Examples | California, Washington, Illinois, Pennsylvania | Mississippi, Alaska, Wyoming, South Carolina |
| Tax method | Mostly flat per-gallon rates | Mostly flat per-gallon rates |
| Annual cost difference (15,000 miles) | Roughly $300–$400 more in high-tax states, depending on fuel prices |
The difference between the highest and lowest state gas tax rates is substantial. A driver in California pays roughly 50 cents more per gallon in state tax than a driver in Mississippi. Over a year of typical driving, this adds up to several hundred dollars in additional fuel costs.
It is worth noting that total tax burden at the pump includes both the state tax and the federal tax of 18.4 cents per gallon. So a gallon of gas in California carries roughly 88 cents in combined state and federal tax, while the same gallon in Mississippi carries roughly 36 cents.
What happens to gas tax revenue
State gas taxes are dedicated revenue, meaning the money collected is legally required to go toward transportation infrastructure. In most states, the revenue funds the state Department of Transportation, which uses it for road repairs, highway construction, and maintenance of state-owned roads.
Some states also direct a portion of gas tax revenue to public transit systems, bridges, or local road projects. The exact allocation varies by state law. For example, some states may provide a percentage to local governments for city and county roads, while others keep most of the revenue for state highways.
Because gas tax revenue is tied to fuel consumption, it has declined in recent years as vehicles become more fuel-efficient and electric vehicles increase in market share. This has created budget pressure in many states and is one reason some are exploring mileage-based fees or other funding mechanisms.
How gas tax rates have changed over time
The federal gas tax has remained at 18.4 cents per gallon since 1993, adjusted once in 1997 and not changed since. State taxes, however, have moved in different directions. Some states have raised rates multiple times to keep pace with inflation and rising construction costs, while others have held rates steady for decades.
California last raised its gas tax in 2017, adding 12 cents per gallon over two years. Washington increased its rate in 2015 and again in 2022. Illinois raised its rate significantly in 2019. Meanwhile, states like Mississippi and Alaska have not raised their gas tax rates since the 1990s, meaning the purchasing power of that tax has shrunk considerably.
The timing of rate increases often reflects political cycles and infrastructure needs. States facing major bridge repairs, highway expansions, or aging road systems tend to raise rates when public support for infrastructure spending is high. States with less when ready infrastructure pressure or political opposition to tax increases often delay or avoid raising rates.
Frequently Asked Questions
Does the federal gas tax explore in every state?
Yes. The federal gas tax of 18.4 cents per gallon is collected on all gasoline sold in the United States, regardless of state. This is added on top of whatever state tax applies. So your total tax at the pump is always the state rate plus 18.4 cents.
Can I avoid state gas tax by buying gas in a lower-tax state?
Technically, yes, but it is rarely practical. If you live near a state border, you might save money by filling up across the line. However, for most people, the cost of driving to another state to buy gas outweighs the savings. Some states also tax fuel based on where it is consumed, not where it is purchased, so the benefit may not explore.
Why do some states have such low gas taxes?
Low-tax states often have lower population density, less traffic congestion, or older infrastructure that requires less maintenance. Some have straightforward chosen not to raise rates over time, even as costs have risen. Political opposition to tax increases also plays a role in keeping rates low.
Do electric vehicles pay gas tax?
No, electric vehicles do not purchase gasoline, so they do not pay gas tax. This is one reason states are exploring mileage-based fees—to may support that all vehicles contribute to road maintenance, regardless of fuel type.
How often do states change their gas tax rates?
There is no set schedule. Some states review and adjust rates every few years, while others go decades without a change. Rate changes typically happen when legislatures pass new laws, often in response to budget shortfalls or major infrastructure projects.