Gasoline tax charges are set to extend in 5 states within the new yr. As soon as they do, drivers in Florida, Georgia, Minnesota, New Jersey and Utah can anticipate to pay barely extra for every gallon of fuel.
The will increase in every state are small, starting from lower than 1 cent to three.3 cents per gallon. However state taxes can add a piece of change to the general value of gasoline. When the adjustments take impact on Jan. 1, the entire state fuel tax charges for these spots will likely be:
New Jersey: 45 cents per gallon.
Florida: 39.4 cents per gallon.
Utah: 39.2 cents per gallon.
Georgia: 33.9 cents per gallon.
Minnesota: 33.9 cents per gallon.
In the meantime, there are a couple of states decreasing their gasoline taxes efficient Jan. 1. New York and North Carolina make annual changes to their tax charges, and the calculations for 2025 will end in a smaller tax. The identical is true in Vermont, the place one charge is adjusted quarterly, and in Michigan, the place the pay as you go gross sales tax charge is revised month-to-month.
Understanding fuel taxes
The worth of oil and the price of refining it are the largest figuring out components within the value of fuel, which has averaged $3.02 per gallon to this point in December. However federal, state and native taxes and charges can add considerably to the entire.
On prime of a federal tax of 18.4 cents per gallon, most states levy a number of taxes and charges on a gallon of fuel. These embody some mixture of excise taxes (imposed on items, providers and actions), gross sales taxes, environmental taxes and inspection charges.
These prices add as much as a median of 32.9 cents per gallon in state taxes, in line with a NerdWallet evaluation of U.S. Vitality Info Administration knowledge. Mixed with the federal tax, that’s about 51.3 cents per gallon, on common, factored into the fuel costs you see at your native station.
States with the best fuel tax
State tax charges fluctuate broadly. California’s charge (69.8 cents per gallon) and Illinois’s charge (67.1 cents) are highest, adopted by Pennsylvania (58.7 cents). Alaska has, by far, the bottom state tax (9 cents per gallon), adopted by Mississippi (18.4 cents) and Hawaii (18.5 cents).
State fuel tax charge adjustments in 2025
In lots of instances, fuel taxes are adjusted commonly based mostly on the shopper value index, a proxy for inflation calculated by the U.S. Bureau of Labor Statistics. Which means taxes might rise (or fall) with the annual charge of inflation. Typically states additionally part in new or increased charges by growing them incrementally.
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Right here’s a extra detailed take a look at the place tax charges are altering on Jan. 1.
States with rising tax charges
In Florida, the state gross sales tax on fuel will improve by half a cent to 17.5 cents per gallon, whereas the State Complete Enhanced Transportation System Tax will tick up by lower than a cent to 9.7 cents per gallon, in line with the Florida Division of Income. Florida drivers additionally pay a 4-cent excise tax, in addition to different environmental charges on fuel. Altogether, state taxes and charges come to 39.4 cents per gallon.
In Georgia, the state excise tax on fuel will improve by eight-tenths of a cent to 33.1 cents per gallon in line with the Georgia Division of Income. When mixed with a small environmental charge, Georgia drivers can pay about 33.9 cents per gallon of fuel once they replenish.
In Minnesota, the state excise tax on fuel will rise by 3.3 cents to 31.8 cents per gallon, in line with the Minnesota Division of Income. Drivers additionally pay about 2.1 cents per gallon in environmental charges, bringing the state taxes whole to 33.9 cents per gallon.
In New Jersey, the “petroleum merchandise gross receipts tax” will improve 2.6 cents to 34.4 cents per gallon, in line with the New Jersey Division of the Treasury. When added to a ten.5-cent excise tax and a small environmental charge, drivers in New Jersey pay about 45 cents per gallon in taxes and charges.
In Utah, the motor gasoline tax charge will go up by 2 cents to 38.5 cents per gallon, in line with the Utah State Tax Fee. Drivers additionally pay an environmental charge that’s about seven-tenths of a cent per gallon. That brings the state’s whole fuel tax charge to about 39.2 cents per gallon.
States with falling tax charges
In Michigan, the month-to-month pay as you go gross sales tax charge will decline for the fourth consecutive month, in line with the Michigan Division of Treasury. For January, will probably be 15.8 cents per gallon. That’ll be reset as soon as once more on Feb. 1. Mixed with the state’s 30-cent excise tax on fuel, in addition to a 1-cent environmental safety charge, drivers pay 46.8 cents per gallon in state taxes and charges.
In New York, an annual adjustment to the state’s petroleum enterprise tax will scale back the fuel tax by eight-tenths of a cent, in line with the New York Division of Taxation and Finance. When added to an 8-cent excise tax, an 8-cent gross sales tax and different environmental charges, New York drivers pay state taxes of about 32.9 cents per gallon of fuel.
In North Carolina, the motor fuels tax charge, which is adjusted yearly, ticks down by one-tenth of a cent to 40.3 cents per gallon, in line with the North Carolina Division of Income. Mixed with an environmental charge, drivers pay 40.6 cents per gallon in state taxes on fuel.
In Vermont, the “motor gasoline transportation infrastructure evaluation” is calculated quarterly. For the primary three months of the brand new yr, it is going to fall by seven-tenths of a cent to about 5.2 cents per gallon, in line with the Vermont Division of Motor Autos. Drivers additionally pay an excise tax of 12.2 cents per gallon and different charges totaling 14.4 cents per gallon. In all, the Vermont state fuel tax charge is about 31.8 cents per gallon.
