Gasoline Tax

State’s Gas Tax to Increase July 1


California’s excise tax on gasoline will increase to 51.1 cents per gallon July 1, up from the current 50.5 cents per gallon, the California Department of Tax and Fee Administration announced this week.

The tax on diesel fuel also will increase, reaching 38.9 cents per gallon (up from 38.5 cents per gallon).

“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 CDTFA wrote in its notice.

Because the annual inflation adjustment was approved in past legislation, the yearly tax increases do not require annual approval by the voters or at least two-thirds of the Legislature.

The Tax Foundation of Washington, D.C., reports that California’s total state taxes and fees on gasoline will reach 63.65 cents per gallon, the highest in the nation. Pennsylvania ranks second at 58.7 cents per gallon.

In March, Pennsylvania Governor Tom Wolf proposed phasing out his state’s gas. The Democratic governor appointed a commission to look for other ways to pay for transportation needs.

After adding the federal gas tax of 18.4 cents per gallon, Californians will pay 82.05 cents in taxes and fees for every gallon of gas.

The California Tax Foundation notes that when all government charges are included (including the costs of the cap-and-trade program, low-carbon fuel standards, and underground fuel storage fees), for motor vehicle fuel priced at $3 per gallon, Californians pay $1.14 in federal and state taxes and fees for each gallon purchased.