Gas Tax: Federal Rate, State Variations, and EV Fees

Every gallon of gasoline sold in the United States carries a federal gas tax of 18.4 cents, plus a state tax that averages 33.3 cents and ranges from 9 cents to 70.9 cents depending on where you fill up.¹ Diesel is taxed at a higher federal rate of 24.4 cents per gallon. You never see either charge broken out on your receipt because the tax is collected upstream from refiners and distributors, then folded into the pump price. Nearly all of the money is earmarked for roads, bridges, and public transit.

How the Tax Is Charged

Fuel taxes are flat, not percentage-based. You owe 18.4 cents per gallon whether gas costs $2.50 or $5.00. Fill a 15-gallon tank and $2.76 of what you paid went to the federal government, plus whatever your state adds. That structure keeps revenue predictable when oil prices swing, but it also means the tax doesn’t grow with inflation the way a sales tax would.

The federal tax is imposed when fuel leaves a refinery or distribution terminal, and the companies handling it pass the cost down until it reaches the pump.² By the time you’re standing at the pump, the tax is already priced in.

Federal Gas Tax Rate

The federal excise tax on gasoline breaks down as 18.3 cents per gallon plus a 0.1-cent surcharge that funds cleanup of leaking underground storage tanks, for a combined 18.4 cents. Diesel is 24.3 cents plus the same 0.1-cent surcharge, totaling 24.4 cents.² The higher diesel rate reflects the greater road wear caused by heavy trucks and buses.

These rates have not changed since 1993, when Congress raised the gasoline tax from 14.1 cents to 18.4 cents. Over three decades of inflation, the tax has lost roughly half its purchasing power.

The 2028 Expiration

Most of the federal rate is not permanent. Under current law, all rates above 4.3 cents per gallon expire on September 30, 2028, along with the storage-tank surcharge.² If Congress doesn’t act, the gasoline tax drops from 18.4 cents to 4.3 cents overnight. Congress has extended these rates repeatedly, and most observers expect another extension, but the statutory sunset is on the books.

State Gas Tax Rates

Every state adds its own layer of fuel taxes on top of the federal 18.4 cents, made up of excise taxes, environmental fees, storage-tank fees, and inspection fees.³ As of January 2026, combined state charges on gasoline ranged from 9.0 cents per gallon at the low end to 70.9 cents at the high end, averaging 33.3 cents nationwide.¹ Two drivers filling the same car with the same fuel can face a 60-cent-per-gallon tax difference based only on which state they’re in.

Variable-Rate Taxes

Most states set a flat per-gallon rate that only changes when the legislature votes to change it. But 26 states and Washington, D.C., have adopted variable-rate fuel taxes that adjust automatically based on the wholesale price of fuel, the consumer price index, or other economic benchmarks.⁴ These adjustments usually happen once or twice a year without a new vote.

Sales Tax and Holidays

A handful of states also apply a percentage-based sales tax on fuel in addition to the per-gallon excise tax. In those states, the total tax rises and falls with the price of gas, so a price spike hits twice: a higher base and a higher sales tax on that base.

States occasionally suspend part or all of their fuel taxes for temporary relief. In 2026, at least three states enacted some form of gas tax holiday, from full excise suspensions to partial rate reductions lasting several months.

Where the Money Goes

Federal fuel tax revenue flows into the Highway Trust Fund. The split is written into statute: of every 18.4 cents collected on a gallon of gasoline, 15.44 cents goes to the Highway Account for roads and bridges, and 2.86 cents goes to the Mass Transit Account for bus and rail systems.⁵ The remaining 0.1 cent funds the Leaking Underground Storage Tank Trust Fund.² Diesel revenue follows the same structure.⁶

State fuel tax revenue typically stays within each state’s transportation budget, going toward resurfacing, bridge repairs, snow removal, public transit operations, and highway patrol. Most states restrict how the money can be spent, though the specifics vary.

Why the Rate Doesn’t Cover the Road Bill

The Highway Trust Fund has been running a structural deficit for years. The rate hasn’t moved since 1993, construction costs have climbed, and vehicles have gotten more fuel-efficient. Revenue no longer covers what Congress authorizes for highway and transit spending. The Congressional Budget Office projects that by fiscal year 2028, the Highway Account may lack sufficient funds to meet federal obligations to states.⁷

In fiscal year 2026, the CBO estimates the Highway Account will collect roughly $40 billion but face about $61 billion in outlays, a gap of nearly $21 billion.⁷ Congress has repeatedly filled these shortfalls with transfers from the general fund. The gap is projected to widen every year through at least 2035, reaching roughly $37 billion annually.

Refunds for Off-Road Fuel Use

If you use gasoline or diesel for something other than driving on public roads, you can claim a credit for the federal tax you paid. The IRS handles this through Form 4136, which you file with your income tax return.⁸ Qualifying uses include:

Fuel used on a farm for farming purposes.
Off-highway business use, such as generators, forklifts, or construction machinery that never touches a public road.
Fuel used in commercial fishing boats.
Fuel used in school buses, qualified local buses, and certain intercity routes.
Fuel used exclusively by state and local governments, nonprofit educational organizations, or qualified blood collector organizations.
Fuel that is exported from the United States.

You report the gallons used for each qualifying purpose and multiply by the per-gallon credit rate on the form.⁹ The credit offsets income tax owed, and if it exceeds your liability, you can receive a refund. Farmers and construction businesses file most of these claims.

Electric Vehicles and Alternative Fuels

The gas tax was built on the assumption that road use and fuel consumption move together. Electric vehicles break that link. An EV driver uses the same roads but buys no taxable fuel.

At least 41 states now charge a special annual registration fee for battery-electric vehicles, and 34 of those also charge plug-in hybrids a separate, usually lower, fee. As of January 2026, annual EV fees range from $50 to $225, and one state is scheduled to reach $290 by 2028.¹⁰ At least 12 states have structured these fees to rise automatically over time.

Compressed natural gas and liquefied natural gas are subject to their own federal excise taxes, set at rates that mirror gasoline and diesel translated into energy-equivalent units: 18.3 cents per gasoline gallon equivalent for CNG and 24.3 cents per diesel gallon equivalent for LNG. As the vehicle fleet diversifies away from gasoline, states are experimenting with per-mile road usage charges and higher EV registration fees, but the gas tax remains the primary source of transportation funding.

1
U.S. Energy Information Administration. Many States Slightly Increased Their Taxes and Fees on Gasoline
2
Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax
3
U.S. Energy Information Administration. How Much Tax Do We Pay on a Gallon of Gasoline and Diesel Fuel
4
National Conference of State Legislatures. Variable Rate Gas Taxes
5
Federal Highway Administration. Highway Trust Fund and Taxes – FAST Act Fact Sheets
6
Office of the Law Revision Counsel. 26 USC 9503 – Highway Trust Fund
7
Congressional Research Service. The Highway Trust Fund’s Highway Account
8
Internal Revenue Service. About Form 4136, Credit for Federal Tax Paid on Fuels
9
Internal Revenue Service. Instructions for Form 4136 and Schedule A
10
National Conference of State Legislatures. Special Registration Fees for Electric and Hybrid Vehicles