In June, the average price that drivers pay at the petrol pump was $3.45. This amount includes a wide range of state taxes in addition to a federal tax of 18.4 cents per gallon.
At the height of the summer driving season, those state taxes are scheduled to rise in seven locations. Effective July 1, the following list displays the total state taxes for certain locations:
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California has the highest gas price per gallon of any state, at 69.8 cents.
- 27.9 cents per gallon in Colorado.
- Illinois’s gas price is 67.1 cents.
- 56.1 cents per gallon in Indiana.
- Missouri: $27.50 a gallon.
- Nebraska: $30.5 for a gallon of fuel.
- Virginia: $40.4 for a gallon of fuel.
- How much these states will raise taxes
The California Department of Tax and Fee Administration has announced that the state’s gas excise tax would increase from 57.9 cents per gallon to 59.6 cents per gallon. The state tax in California on a gallon of gasoline will increase from around 68 cents to nearly 70 cents when other state taxes and levies are included.
The Colorado Department of Revenue announced that the road usage tax in the state will go from three cents to four cents per gallon. Furthermore, an environmental tax will rise to approximately 1.3 cents per gallon from 0.6 cents already charged. The 22-cent gas tax is in addition to those costs. In all, the state gas tax will rise from around 26 cents to 28 cents per gallon.
According to the Illinois Department of Revenue, the state’s gas tax in Illinois will rise from 45.4 cents to 47 cents per gallon. The state’s gas tax will rise from 66.5 cents to 67.1 cents, making it the second highest in the nation overall.
According to the Indiana Department of Revenue, the state’s gas tax will rise from 34 to 35 cents per gallon. The state levies a fuel usage tax in addition to that excise tax and a one-cent oil inspection fee. Every month, that tax rate is modified. The use tax rate is set to increase to 20.1 cents per gallon in July. Indiana drivers will pay a total of 56.1 cents per gallon in state taxes.
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According to the Missouri Department of Revenue, the state’s motor gasoline tax rate will rise from 24.5 cents to 27 cents per gallon. The state taxes will come to 27.5 cents per gallon when added to two extra costs that are assessed on petrol, totaling around half a cent.
According to the Nebraska Department of Revenue, the gasoline tax rate in Nebraska increases by half a penny to 29.6 cents per gallon. Drivers in the state pay 30.5 cents in state taxes per gallon in addition to an environmental fee.
According to the Virginia Department of Motor Vehicles, the state’s motor gasoline tax rate will rise from 29.8 cents to 30.8 cents per gallon. Furthermore, the petrol sales tax rate in the state will rise from 8.7 cents to 9 cents per gallon. All told, state taxes for drivers will come to 40.4 cents per gallon.
How the price of gas is determined
The cost of refining oil and its price are major factors that affect gas prices. However, the total may increase dramatically due to local, state, and federal taxes and levies.
Most states put various taxes and fees on a gallon of petrol, in addition to the federal tax of 18.4 cents per gallon. These taxes and fees may include sales taxes, environmental taxes, excise taxes (placed on products, services, and activities), and inspection fees.
According to a NerdWallet study of U.S. Energy Information Administration statistics, those expenses total 32.6 cents in state taxes per gallon on average. That raises the price of a gallon of petrol by an average of 51 cents when combined with the federal tax.
However, state tax rates differ greatly. The highest rates are in Pennsylvania (58.7 cents) and Illinois (67.1 cents) and California (69.8 cents a gallon). The states with the lowest state taxes are Alaska (9 cents per gallon), Mississippi (18.4 cents), and Hawaii (18.5 cents).
The U.S. Bureau of Labor Statistics calculates the consumer price index, which is frequently used as a proxy for inflation for adjusting gas taxes annually. This implies that taxes could increase (or decrease) in tandem with the yearly inflation rate. States may also gradually raise their fees on a yearly basis to introduce new or increased levies.
States frequently utilize the tax money they receive to finance environmental and infrastructural development projects.
