9 Fuel-Tax Changes in 2017

Samantha Oller, Senior Editor/Fuels, CSP

gas pump car

CHICAGO -- Several states saw changes to their fuel taxes at the start of 2017, ranging from increases of several cents per gallon (CPG) to actual decreases in a couple of cases.

On a CPG basis, the biggest fuel-tax increase on Jan. 1, was in New Jersey, where the diesel tax jumped 15.9 CPG, just two months after the state’s gasoline tax rose by 22.6 CPG.

Among the other fuel-tax increases, three were triggered by legislation, while four were part of automatic adjustments based on states’ various tax formula, according to the Institute on Taxation and Economic Policy (ITEP), Washington, D.C. 

Meanwhile, legislators in several states, including TennesseeAlaska, Oklahoma and Indiana, are taking a look at potentially increasing their fuel taxes to help fill transportation budget holes.

Read on for a rundown of the first increases—and decreases—in state fuel taxes for 2017 ...

1. Pennsylvania

Pennsylvania road

Pennsylvania had the largest gas-tax increase in the country on Jan. 1, rising 7.9 CPG to reach 58.3 CPG, the highest in the country. This does not include the 18.4-CPG federal fuel excise tax. Its diesel tax, meanwhile, rose 10.7 CPG to 74.7 CPG. Both increases were part of 2013 transportation funding legislation that included removing a cap on the wholesale price of gasoline, the Pittsburgh Post-Gazette reported.

2. Michigan

Michigan road

Michigan's state gas tax rose 7.3 CPG to reach 26.3 CPG, marking its first increase in two decades. When combined with a 6% sales tax, this will give Michigan the fifth-highest at-pump gas tax in the United States, according to the Tax Foundation, for a combined state tax rate of 37.8 CPG. 

Diesel taxes, meanwhile, rose 11.3 CPG. The increases are part of 2015 legislation that also will tie the gas tax to inflation beginning in 2022.

3. Nebraska

Nebraska road

Nebraska's state gas tax rose 1.5 CPG to 27.3 CPG, as part of 2015 legislation that increases it by 6 CPG over four years, according to the Omaha World-Herald. An earlier 1.5-CPG increase took place in January 2015. Diesel taxes also rose 1.5 CPG.

4. Georgia

Atlanta Georgia

As part of a new tax-rate formula enacted in 2015 that factors in inflation and fuel efficiency, Georgia’s gas tax increased 0.3 CPG, while its diesel tax rose 0.4 CPG. This follows a 6.7-CPG increase in the gas tax that occurred in July 2015.

5. North Carolina

North Carolina road

Another state that recently adjusted its rate formula, North Carolina, increased its gas and diesel taxes each by 0.3 CPG. In 2015, the state changed its price-based approach to a rate tied to population and inflation. 

6. Indiana

Indiana road

Indiana’s gas tax, which is tied to the price of fuel, rose 0.2 CPG in January. The Northwest Indiana Times reported that a state task force has proposed increasing the gas tax by 8 to 10 CPG and automatically adjusting it based on inflation, to help raise money for repairing roads and bridges. It also would index taxes on diesel, biodiesel and compressed natural gas to inflation.

7. Florida

Daytona Beach Florida

Florida’s gasoline and diesel taxes each rose 0.1 CPG on Jan. 1, to reach 17.4 CPG. The state’s fuel taxes are tied to the consumer price index. Some counties have their own fuel taxes, as well.

8. New York

New York City street

New York was one of two states to see its fuel taxes fall on Jan. 1. The state’s fuel taxes, which are tied to the price of fuel, dropped 0.8 CPG for both gasoline and diesel as part of a yearly adjustment.

9. West Virginia

West Virginia county road

State gas and diesel taxes dropped 1 CPG in West Virginia, which also ties the levies to the price of fuel and adjusts them on an annual basis.