The gasoline tax in the United States is a per-gallon excise charged on fuel before it reaches the pump. Drivers pay a combined federal rate of 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel, plus a state tax that runs anywhere from 9.0 cents to 70.9 cents per gallon depending on where you fill up.1U.S. Energy Information Administration. Many States Slightly Increased Their Taxes and Fees on Gasoline The money funds roads, bridges, and transit.
How the Tax Is Layered at the Pump
The price you see on the pump reflects several distinct taxes stacked on top of the base cost of fuel. Fuel taxes are almost always charged as a fixed amount per gallon rather than as a percentage of the sale price. That means the tax you pay stays the same whether crude oil is at $50 or $120 a barrel. You encounter a federal layer first, then a state assessment, and sometimes additional local charges.
Some states also apply their regular sales tax to the retail price of gasoline in addition to the per-gallon excise. Local governments occasionally add their own cents-per-gallon levies to fund city or county transit projects. A single fill-up can generate revenue for three or four different levels of government at once.
Federal Gasoline Tax Rate
The federal government taxes fuel under 26 U.S.C. § 4081, which imposes the tax when fuel leaves a refinery or terminal for distribution. The statute sets the base rate at 18.3 cents per gallon for gasoline and 24.3 cents per gallon for diesel and kerosene.2Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax A separate 0.1-cent-per-gallon surcharge funds the Leaking Underground Storage Tank (LUST) Trust Fund, bringing the effective totals to 18.4 cents for gasoline and 24.4 cents for diesel.3U.S. Energy Information Administration. How Much Tax Do We Pay on a Gallon of Gasoline and on a Gallon of Diesel Fuel
Congress last raised these rates on October 1, 1993 and hasn’t touched them since. The federal portion has lost roughly half its purchasing power to inflation over the past three decades.
State Gasoline Tax Rates
Every state adds its own fuel tax on top of the federal rate. As of January 2026, state taxes and fees on gasoline range from 9.0 cents per gallon in Alaska to 70.9 cents per gallon in California.1U.S. Energy Information Administration. Many States Slightly Increased Their Taxes and Fees on Gasoline Most states use a flat cents-per-gallon rate set by the legislature. Others tie the rate to the wholesale price of fuel or to an inflation index so it adjusts automatically each year or quarter.
Many states tack on smaller supplementary fees as well. Environmental cleanup fees and underground storage tank fees typically add a fraction of a cent to a few cents per gallon. Some states layer a percentage-based sales tax on top of the per-gallon excise, so the tax burden in those states rises and falls with fuel prices. The total tax load can vary dramatically based on where you happen to be driving.
Where Gasoline Tax Money Goes
Federal fuel tax revenue flows into the Highway Trust Fund, a dedicated account established by 26 U.S.C. § 9503. The fund has two sub-accounts: the Highway Account, which pays for road and bridge construction and maintenance, and the Mass Transit Account, which supports buses, rail, subways, and other public transit.4Office of the Law Revision Counsel. 26 USC 9503 – Highway Trust Fund Of the 18.4 cents collected per gallon of gasoline, 2.86 cents is allocated to the Mass Transit Account and the remainder goes to the Highway Account.
The fund also receives revenue from taxes on heavy trucks, trailers, tires, and heavy vehicle use, channeled through the same statutory framework. The separate 0.1-cent LUST surcharge goes to the Leaking Underground Storage Tank Trust Fund, administered by the EPA to clean up petroleum leaks from underground tanks at gas stations and other storage sites.5US EPA. Leaking Underground Storage Tank Trust Fund State fuel taxes generally follow the same earmarking philosophy, with most states dedicating the money to transportation budgets rather than general spending.
Why the Highway Trust Fund Is Running Short
The Highway Trust Fund has been spending more than it collects since 2008. The federal rate hasn’t changed in over 30 years while construction costs have climbed steadily, so the fund can’t keep pace with maintaining and expanding the nation’s roads and transit systems. Congress has repeatedly transferred money from the general fund to keep it solvent, including $118 billion through the Infrastructure Investment and Jobs Act in 2021.6Congressional Research Service. The Highway Trust Fund’s Highway Account
The Congressional Budget Office projects that both the Highway Account and the Mass Transit Account could approach a zero balance by fiscal year 2028.6Congressional Research Service. The Highway Trust Fund’s Highway Account If the fund runs dry, the Department of Transportation would have to slow reimbursements to states and reduce funding allocations, which would delay road projects across the country. Congress faces an unpleasant set of options: raise the gas tax for the first time in decades, find another revenue source, or keep patching the gap with general fund transfers that add to the federal deficit.
Electric Vehicles and What Comes Next
Electric vehicles pay nothing at the pump, which creates an obvious problem for a transportation funding system built on taxing gallons of fuel. As EV adoption grows, the revenue base for the Highway Trust Fund shrinks further. Most states have responded by imposing annual registration surcharges on electric vehicles, typically ranging from $50 to $200 or more, to recoup some of the lost fuel tax revenue.
A handful of states have gone further by taxing electricity sold at public charging stations, using per-kilowatt-hour rates, percentage-based assessments, or a combination of both. These charging taxes are still in early stages, and the rates vary widely.
At the federal level, the Infrastructure Investment and Jobs Act authorized a pilot program to test a per-mile user fee as a potential long-term replacement for the gas tax. The Department of Transportation is tasked with recruiting volunteer drivers from all 50 states to test different methods of tracking miles driven and collecting fees, with the program funded through fiscal year 2026.7Alternative Fuels Data Center. Federal System Alternative Funding Pilot The idea is to charge drivers based on how much they actually use the roads, regardless of what powers their vehicle. Whether Congress will adopt such a system nationally remains an open question, but the current gasoline tax structure clearly can’t sustain road funding on its own much longer.