New Year's Gas Tax Changes: Seven Up, Two Down


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By all indications, 2017 is shaping up to be a major year for state gas tax reform. Alaska Gov. Bill Walker has already proposed tripling his state’s gas tax. Task forces in Indiana and Louisiana have laid the groundwork for significant gas tax reforms in those states. And Tennessee Gov. Bill Haslam seems to be on the verge of releasing a gas tax proposal as well. Altogether, it appears that more than a dozen states will seriously debate gas tax changes next year.

But 2017 will also usher in a few gas tax changes before state legislative sessions even begin. Specifically, seven states will be raising gasoline tax rates while two states will be cutting them. Three of the increases (in Pennsylvania, Michigan, and Nebraska) are the result of legislation enacted by lawmakers during the last few years. The other four increases, and both of the rate cuts, are automatic adjustments based on various formulas those states use in setting their gas tax rates.

Here are the details on the changes taking place in each state:

Pennsylvania is raising its gasoline tax by 7.9 cents per gallon and its diesel tax by 10.7 cents. These are the final increases associated with legislation enacted by lawmakers in 2013, though further increases could be triggered in the years ahead if gas prices rise.

Michigan is raising its gasoline tax by 7.3 cents per gallon. The state’s diesel tax will rise by 11.3 cents to bring the two tax rates into alignment with each other. These changes are the result of legislation enacted in 2015. No further changes are expected until 2022, when the state’s gas tax rate will begin rising annually to keep pace with inflation.

Nebraska is raising its gasoline and diesel tax rates by 1.5 cents per gallon as part of a four-part, six-cent increase enacted in 2015.

Georgia’s gasoline tax will rise by 0.3 cents, and its diesel tax will rise by 0.4 cents, under a new formula linking the state’s fuel tax rates to growth in inflation and vehicle fuel efficiency.

North Carolina’s gas and diesel tax rates will rise by 0.3 cents under a new formula linking the state’s fuel tax rates to growth in population and energy prices.

Indiana’s gasoline tax rate will rise by 0.2 cents as it varies each month alongside the price of gasoline.

Florida will implement 0.1 cent gas and diesel tax rate increases because its fuel tax rates are tied to inflation.

New York will cut its gas and diesel tax rates by 0.8 cents per gallon as part of an annual adjustment based on the price of gas.

West Virginia, much like New York, will cut its gas and diesel tax rates by 1.0 cents per gallon as part of an annual adjustment based on the price of gas.

New Jersey’s diesel tax rate will rise by 15.9 cents on January 1 due to legislation enacted last year. The state will not change its gasoline tax rate on January 1, though it did implement a 22.6 cent increase in that tax on November 1, 2016.

See chart of gasoline tax rate changes 

See chart of diesel tax rate changes

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