Gasoline Tax

California Gas Tax Increasing July 1


California’s excise tax on gasoline will increase 4 cents per gallon and the diesel fuel tax will increase 3.1 cents per gallon effective July 1, the California Department of Tax and Fee Administration announced May 25.

The gas tax will be 57.9 cents per gallon, up from the current 53.9 cents. The excise tax on diesel fuel will be 44.1 cents per gallon, up from 41 cents.

The new rates were announced via a CDTFA notice to retailers. The tax agency is authorized by previously approved legislation to adjust the rates for inflation every year.

“We are required to adjust the motor vehicle fuel and diesel fuel excise tax rates on July 1 of each year, based on the percentage change in the California Consumer Price Index, as calculated by the Department of Finance,” the notice states.

Prior to the state’s reorganization of the tax agencies in 2017, the State Board of Equalization was responsible for approving the annual adjustments by March 1, giving retailers, truck drivers, and other motorists three months of advance notice before the change took effect. The BOE made the annual adjustments in open meetings announced to the media and public at least 10 days in advance, and typically discussed the change during the public meetings before holding a roll-call vote.

The gas tax has increased more than 220 percent since 2010, when it was 18 cents per gallon. The CDTFA’s online chart (not yet updated with the just-announced increase) shows the growth in the gas and diesel fuel tax rates since 2010.