California’s excise tax on gasoline will increase to 61.2 cents per gallon July 1, an increase of 1.6 cents per gallon over the current rate of 59.6 cents per gallon, the California Department of Tax and Fee Administration announced June 4.
The tax rate on diesel fuel – a matter of great interest for many businesses, especially those in the trucking and agricultural industries – will increase from 45.4 cents per gallon to 46.6 cents per gallon, likely leading to higher costs for consumers for many goods and services.
The tax increases are in addition to any other increases that may be imposed as a result of fuel standards developed by the California Air Resources Board (CARB). Increases resulting from CARB actions also would take effect July 1.
The gas tax rate has more than doubled during the past 10 years. The largest year-to-year increase occurred in 2017 as a result of SB 1 (Chapter 5, Statutes of 2017), which increased gas tax by 12 cents per gallon and increased the diesel tax by 20 cents per gallon (both effective November 1, 2017) and required that the rates be adjusted annually based on the California Consumer Price Index.
Although Californians often mention vehicle-related taxes as a topic of major concern – and cited an increase in the vehicle license tax as a major factor in their decision to recall Governor Gray Davis in 2003 – the CDTFA did not issue a news release or use its social media channels to alert the media or general public to the increase. Instead, the increase was posted on the agency’s website as a special notice to retailers of gas and diesel fuels.