Fuel taxes in the United States

The first US state to tax fuel was Oregon, introduced on February 25, 1919.Corning, Howard M. Dictionary of Oregon History. Binfords & Mort Publishing, 1956. It was a 1¢/gal tax.{{cite news |url=http://blog.oregonlive.com/commuting/2010/12/a_brief_history_of_oregon_vehi.html |title=A brief history of Oregon vehicle fees and fuel taxes |work=The Oregonian/Oregon Live |date=December 12, 2010}} In the following decade, all of the US states (48 at the time), along with the District of Columbia, introduced a gasoline tax. By 1939, many states levied an average fuel tax of 3.8¢/gal (1¢/L).

In the years since being created, state fuel taxes have undergone many revisions.{{cite journal |url=http://www.its.berkeley.edu/sites/default/files/publications/UCB/99/WP/UCB-ITS-WP-99-3.pdf |last1=Ang-Olson |first1=Jeffrey |display-authors=etal |title=Variable-Rate State Gasoline Taxes |journal=Institute of Transportation Studies, University of California Berkeley |date=July 1999}} While most fuel taxes were initially levied as a fixed number of cents per gallon, {{as of|2016|lc=y}}, 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.{{cite web |url=http://itep.org/itep_reports/2016/02/most-americans-live-in-states-with-variable-rate-gas-taxes-2.php |title=Most Americans Live in States with Variable-Rate Gas Taxes |work=Institute on Taxation Economic Policy |date=February 5, 2016}}

The table below includes state and local taxes and fees. The American Petroleum Institute uses a weighted average of local taxes by municipality population to create an average tax for the entire state. Similarly, the national average is weighted by the fuel volume sold in each state. Because many states with the highest taxes also have higher populations, more states (i.e., the less populated ones) have below-average taxes than above-average taxes.

Most states exempt gasoline from general sales taxes. However, several states collect full or partial sales tax in addition to the excise tax. Sales tax is not reflected in the rates below.

The first federal gasoline tax in the United States was created on June 6, 1932, with the enactment of the Revenue Act of 1932, which taxed 1¢/gal (0.3¢/L). Since 1993, the US federal gasoline tax has been unchanged (and not adjusted for inflation of nearly 113 percent through 2023) at 18.4¢/gal (4.86¢/L). Unlike most other goods in the US, the price advertised (e.g., on pumps and stations' signs) includes all taxes, as opposed to inclusion at the point of purchase (i.e., as opposed to prices of goods in, e.g., many stores advertised on shelves without tax which is instead calculated at checkout by many vendors).

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, including a minority for mass transit projects.[https://web.archive.org/web/20070929211337/http://www.pbs.org/newshour/bb/transportation/july-dec07/infrastructure_08-15.html Online NewsHour: Conversation | Peters Discusses Infrastructure | August 15, 2007 | PBS] However, revenues from other taxes are also used in federal transportation programs.

File:Federal excise taxes on fuel.webp

Federal fuel taxes raised $36.4 billion in Fiscal Year 2016, with $26.1 billion raised from gasoline taxes and $10.3 billion raised from diesel and special motor fuel taxes.{{cite web |url=https://www.fhwa.dot.gov/policyinformation/statistics/2016/fe10.cfm |title=Status of The Federal Highway Trust Fund |work=US Department of Transportation, Federal Highway Administration}} The tax was last raised in 1993 and is not indexed to inflation. Total inflation from 1993 until 2017 was 68 percent or up to 77 percent, depending on the source.[https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=199307&year2=201701 CPI Inflation Calculator]{{Cite web | url=http://www.taxpolicycenter.org/briefing-book/what-are-major-federal-excise-taxes-and-how-much-money-do-they-raise |title = What are the major federal excise taxes, and how much money do they raise?}}

Some policy advisors believe an increased tax is needed to fund and sustain the country's transportation infrastructure, including mass transit. As infrastructure construction costs have grown and vehicles have become more fuel efficient, the purchasing power of fixed-rate gas taxes has declined (i.e., the unchanged tax rate from 1993 provides less real money than it originally did, when adjusted for inflation).{{cite web |url=http://www.itep.org/itep_reports/2013/09/a-federal-gas-tax-for-the-future.php |title=A Federal Gas Tax for the Future |work=Institute on Taxation Economic Policy |date=September 23, 2013}} 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 of these tax rates to inflation.{{cite web |url=http://financecommission.dot.gov/Documents/NSTIF_Commission_Final_Report_Exec_Summary_Feb09.pdf |title=Paying Our Way |archive-url=https://web.archive.org/web/20090402213541/http://financecommission.dot.gov/Documents/NSTIF_Commission_Final_Report_Exec_Summary_Feb09.pdf |archive-date=2009-04-02}}

Critics of gas tax increases argue that much of the revenue is diverted to other government programs and debt servicing unrelated to transportation infrastructure.{{cite news| url = https://www.wsj.com/articles/states-siphon-gas-tax-for-other-uses-1405558382| title = States Siphon Gas Tax for Other Uses - WSJ| newspaper = Wall Street Journal| date = July 17, 2014| last1 = Paletta| first1 = Damian}} However, 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.{{cite web |last=Bishop-Henchman |first=Joseph |date=January 3, 2014 |title=Gasoline Taxes and User Fees Pay for Only Half of State & Local Road Spending |url=https://taxfoundation.org/data/all/state/gasoline-taxes-and-user-fees-pay-only-half-state-local-road-spending/ |archive-url=https://web.archive.org/web/20240529051132/https://taxfoundation.org/data/all/state/gasoline-taxes-and-user-fees-pay-only-half-state-local-road-spending/ |archive-date=2024-05-29 |access-date=2024-08-29 |work=Tax Foundation}}

Some believe an increased fuel cost would encourage less consumption and reduce America's dependence on foreign oil.{{citation needed|reason=Who?|date=March 2020}} Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil.{{citation needed|reason=According to?|date=March 2020}} However, significantly since 2008, increased domestic output (e.g., fracking of shale and other energy resource discoveries) and rapidly growing production efficiencies have reduced considerably such spending, and this falling trend is expected to continue.{{Cite web|url=http://www.eia.gov/todayinenergy/detail.cfm?id=15531|title = China is now the world's largest net importer of petroleum and other liquid fuels - Today in Energy - U.S. Energy Information Administration (EIA)}}

{{Update|tax prices appear to be outdated as of March 2021 report|date=March 2021}}

Aviation gasoline (Avgas): The tax on aviation gasoline is $0.194 per gallon.{{citation needed|reason=According to? As of Mar 2021: Gen av appears to be $0.141/gal & commercial jet fuel appears to be $0.044/gal, per EIA (source below, above table) plus $0.001/gal underground leak fund|date=March 2020}} When used in a fractional ownership program aircraft, gasoline also is subject to a surtax of $0.141 per gallon.{{citation needed|date=March 2020}}

Kerosene for use in aviation (Jet fuel): Generally, kerosene is taxed at $0.244 per gallon unless a reduced rate applies.{{citation needed|date=March 2020}} For kerosene removed directly from an on-airport terminal (ramp) directly into the fuel tank of an aircraft for use in non-commercial aviation, the tax rate is $0.219.{{citation needed|date=March 2020}} The rate of $0.219 also applies if kerosene is transported directly into any aircraft from a qualified refueler truck, tanker, or tank wagon that is loaded with the kerosene (again, when done directly on-airport, e.g., on the ramp). Notably, the airport terminal doesn't need to be a passenger-carrying, secured airport terminal for this rate to apply. However, the refueling truck, tanker, or tank wagon must meet the requirements discussed later under particular refueler trucks, tankers, and tank wagons treated as terminals.

These taxes mainly fund airport and Air Traffic Control operations by the Federal Aviation Administration (FAA), of which commercial aviation is the biggest user.{{citation needed|date=March 2020}}

• Carbon taxes in the United States
• Excise tax in the United States
• Federal Highway Trust Fund (United States)
• Gas tax holiday
• National Association of Convenience Stores
• RBOB - (Reformulated Blendstock for Oxygenate Blending)

{{Reflist}}

• [http://www.artba.org/economics_research/reports/gas_tax_history.htm History of the gas tax in the United States]
• [http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2013/Pages/default.aspx 2013 NACS Annual Fuels Report]

{{Aviation taxation}}

Category:Taxation in the United States

United States

Category:Aviation taxes

Category:Aviation in the United States

Category:Transportation in the United States