State Gas Tax Changes Effective July 1: Six Up; One Down

Carl Davis, Research Director of the Institute on Tax and Economic Policy (ITEP) writes where gas taxes used to fund transportation infrastructure increased, if only by decimal points, and about the aberration—the six-cent plunge in California.

3 minute read

July 2, 2015, 6:00 AM PDT

By Irvin Dawid


"The largest gas tax increases are taking place in Idaho (7 cents per gallon) and Georgia (6.7 cents for gas and 7.7 cents for diesel)," writes Davis.  "Each of these increases is occurring due to legislation enacted earlier this year."

On to the negative side of fuel tax changes that took effect July 1:

  • California's six-cent tax decrease from 36 cents to 30 cents results from a vote of the state's Board of Equalization on Feb. 24 required by the 2010 gas tax swap legislation. Legislation has been introduced to change the formula to avoid the large spikes in increases or decreases required.to adjust the tax. SB 321 passed the Senate 40-0 on June 1 and is now in the Assembly. But it's not all negative as Davis notes that "a unique quirk in California’s law will cause the diesel tax to rise by 2 cents." 
  • Connecticut: "The diesel tax rate will drop by 4.2 cents as a result of laws linking gas tax rates to gas prices," writes Davis. "Earlier this year, similar automatic cuts had been scheduled to take place in Kentucky and North Carolina, but lawmakers in both of these states wisely intervened by placing a 'floor' on their gas tax rates that minimized the loss of infrastructure revenue," adds Davis.

Perhaps it's not correct to list those two states as gas tax increases as they in fact decreased - but they are included among the "seven states" in an earlier Planetizen post of 2015 state legislated gas tax increases nonetheless.

Additional notes on state gas taxes mentioned above:

Finally, omitted above is:

  • Alaska's .95 cent gas tax increase: It is not included as this post is based on the ITEP news blog. In an email, ITEP research director Carl Davis explained that only infrastructure-funding tax changes were included. The Alaska tax increase, as significant (or insignificant) it may be, will be used to fund oil spill prevention and response.

Monday, June 29, 2015 in Tax Justice Blog

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