Fuel taxes in the United States
The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.[1][2] On average, as of July 2016, state and local taxes and fees add 29.78 cents to gasoline and 29.81 cents to diesel, for a total US average fuel tax of 48.18 cents per gallon for gas and 54.21 cents per gallon for diesel.[3]
State taxes
The first US state tax on fuel was introduced in February 1919 in Oregon.[4] It was a 1¢/gal tax.[5] In the following decade, all of the U.S. states (48 at the time), along with the District of Columbia, introduced a gasoline tax. By 1939, an average tax of 3.8¢/gal (1¢/L) of fuel was levied by the individual states.
In the years since being created, state fuel taxes have undergone many revisions[6] While most fuel taxes were initially levied as a fixed number of cents per gallon, as of 2016 nineteen states and District of Columbia have fuel taxes with rates that vary alongside changes in the price of fuel, the inflation rate, vehicle fuel-economy, or other factors [7]
The table below includes state and local taxes and fees. The American Petroleum Institute uses a weighted average of local taxes by population of each municipality to come up with an average tax for the entire state. Similarly, the national average is weighted by volume of fuel sold in each state. Because many of the states with the highest taxes also have higher populations, more states have below average taxes than above average taxes.
| State | Gasoline tax (excludes federal tax of 18.4¢/gal) |
Diesel tax (excludes federal tax of 24.4¢/gal) |
|---|---|---|
| US (Volume-Weighted) Average | 30.29 | 30.01 |
| Alabama | 20.91 | 21.89 |
| Alaska | 12.25 | 12.75 |
| Arizona | 19.00 | 27.00 |
| Arkansas | 21.80 | 22.80 |
| California | 38.57 | 38.69 |
| Colorado | 22.00 | 20.50 |
| Connecticut | 38.30 | 41.70 |
| Delaware | 23.00 | 22.00 |
| District of Columbia | 23.50 | 23.50 |
| Florida | 36.58 | 33.77 |
| Georgia | 31.17 | 34.82 |
| Hawaii | 43.00 | 40.74 |
| Idaho | 33.00 | 33.00 |
| Illinois | 33.45 | 34.57 |
| Indiana | 32.07 | 40.38 |
| Iowa | 31.70 | 33.50 |
| Kansas | 24.03 | 26.03 |
| Kentucky | 26.00 | 23.00 |
| Louisiana | 20.01 | 20.01 |
| Maine | 30.01 | 31.21 |
| Maryland | 33.50 | 34.25 |
| Massachusetts | 24.00 | 24.00 |
| Michigan | 33.26 | 28.99 |
| Minnesota | 28.60 | 28.60 |
| Mississippi | 18.79 | 18.40 |
| Missouri | 17.30 | 17.30 |
| Montana | 27.75 | 28.50 |
| Nebraska | 26.70 | 27.10 |
| Nevada | 33.86 | 28.56 |
| New Hampshire | 23.825 | 23.825 |
| New Jersey | 37.50 | 41.50 |
| New Mexico | 18.88 | 22.88 |
| New York | 43.40 | 42.90 |
| North Carolina | 34.25 | 34.25 |
| North Dakota | 23.00 | 23.00 |
| Ohio | 28.00 | 28.00 |
| Oklahoma | 17.00 | 14.00 |
| Oregon | 31.12 | 30.36 |
| Pennsylvania | 51.40 | 65.10 |
| Rhode Island | 34.00 | 34.00 |
| South Carolina | 16.75 | 16.75 |
| South Dakota | 30.00 | 30.00 |
| Tennessee | 21.40 | 18.40 |
| Texas | 20.00 | 20.00 |
| Utah | 29.41 | 29.41 |
| Vermont | 30.46 | 32.00 |
| Virginia | 22.39 | 26.08 |
| Washington | 49.40 | 49.40 |
| West Virginia | 33.20 | 33.20 |
| Wisconsin | 32.90 | 32.90 |
| Wyoming | 24.00 | 24.00 |
Federal taxes
The first federal gasoline tax in the United States was created on June 6, 1932 with the enactment of the Revenue Act of 1932 with a tax of 1¢/gal (0.3¢/L). Since 1993, the U.S. federal gasoline tax has been 18.4¢/gal (4.86¢/L). Unlike most other goods in the US, the price displayed includes all taxes, as opposed to inclusion at the point of purchase.
Then-Secretary of Transportation Mary Peters stated on August 15, 2007 that about 60% of federal gas taxes are used for highway and bridge construction. The remaining 40% goes to earmarked programs.[9] However, revenues from other taxes are also used in federal transportation programs.
Federal tax revenues
Federal fuel taxes raised $35.2 billion in Fiscal Year 2014, with $25.0 billion raised from gasoline taxes and $10.2 billion raised from taxes on diesel and special motor fuels.[10] The tax was last raised in 1993 and is not indexed to inflation. Total inflation from 1993 until 2015 was 64.6 percent.[11]
Public policy
Some policy advisors believe that an increased tax is needed to fund and sustain the country's transportation infrastructure. As infrastructure construction costs have grown and vehicles have become more fuel efficient, the purchasing power of fixed-rate gas taxes has declined.[12] 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.[13]
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.[14] 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.[15]
Some believe that an increased cost of fuel would also encourage less consumption and reduce America's dependence on foreign oil. Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil. However, due to increased domestic output (fracking of shale and other energy resource discoveries) as well as rapidly increasing production efficiencies, since 2008 this has already significantly reduced and expected to continue to fall.[16]
Aviation fuel taxes
Aviation Gasoline (Avgas), The tax on aviation gasoline is $.194 per gallon. When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $.141 per gallon.
Kerosene for use in aviation (Jetfuel), Generally, kerosene is taxed at $.244 per gallon unless a reduced rate applies. For kerosene removed directly from a terminal into the fuel tank of an aircraft for use in non-commercial aviation, the tax rate is $.219. The rate of $.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 airport terminal doesn't need to be a secured airport terminal for this rate to apply. However, the refueler truck, tanker, or tank wagon must meet the requirements discussed under Certain refueler trucks, tankers, and tank wagons, treated as terminals, later.
These taxes mainly fund airport and Air Traffic Control operations by the Federal Aviation Administration (FAA), of which commercial aviation is the biggest user.
See also
- Carbon taxes in the United States
- Federal Highway Trust Fund (United States)
- Gas tax holiday
- National Association of Convenience Stores
US tax system:
References
- ↑ http://www.eia.gov/petroleum/marketing/monthly/pdf/enote.pdf U.S. Energy Information Administration/Petroleum Marketing Monthly
- ↑ http://www.fhwa.dot.gov/infrastructure/gastax.cfm US Department of Transportation, Federal Highway Administration: When did the Federal Government begin collecting the gas tax?
- ↑ Motor Fuel Taxes, American Petroleum Institute, 9 August 2016
- ↑ Corning, Howard M. Dictionary of Oregon History. Binfords & Mort Publishing, 1956.
- ↑ , The Oregonian/Oregon Live, 12 December 2010
- ↑ , Ang-Olson, Jeffrey, et al. Variable-Rate State Gasoline Taxes. Institute of Transportation Studies, University of California Berkeley, 1999.
- ↑ , Institute on Taxation Economic Policy, 5 February 2016
- ↑ , State Motor Fuel Taxes: Notes Summary.
- ↑ Online NewsHour: Conversation | Peters Discusses Infrastructure | August 15, 2007 | PBS
- ↑ https://www.fhwa.dot.gov/policyinformation/statistics/2014/fe10.cfm U.S. Department of Transportation, Federal Highway Administration
- ↑ US inflation Calculator
- ↑ , Institute on Taxation Economic Policy, 23 September 2013
- ↑
- ↑ http://www.wsj.com/articles/states-siphon-gas-tax-for-other-uses-1405558382
- ↑ , Tax Foundation, 3 January 2014
- ↑ http://www.eia.gov/todayinenergy/detail.cfm?id=15531