Officials in 10 States Adopt, Pursue Higher Fuel Tax Rates

Three states have adopted a fuel tax increase in 2019 with seven other states eyeing higher rates to fund their roadways

Car Filling Station Fuel Pump 9796

During the past six years, nearly 30 states have raised or reformed their fuel tax rates. Despite the progress made to address transportation funding needs, legislators in more and more states continue to pursue additional revenue enhancements.

In the first months of 2019 legislators in Alabama, Arkansas and Ohio voted to boost road funding largely via higher fuel taxes.

The new Alabama law will raise the state’s fuel tax rates by a dime.

The state now collects 18 cents per gallon on gas and 19 cents on diesel. The fuel rates have remained unchanged since 1992.

Existing tax rates will increase by 10 cents over three years to 28 cents and 29 cents, respectively. Effective Sept. 1, the tax rates will be raised by 6 cents. Additional 2-cent increases will occur in October 2020 and 2021.

The additional tax collection would raise $323 million annually when fully implemented.

In nearby Arkansas, a new law will raise nearly $95 million annually for the state Department of Transportation. 

Unchanged since 1999, the state collects a 21.5-cent excise tax on gas purchases. A 22.5-cent fuel tax rate is collected on diesel purchases.

The change approved by lawmakers will implement a wholesale fuel tax that amounts to a 3-cent-per-gallon gas tax increase. Effective Oct. 1, the new rate will be 24.5 cents. At the same time, the diesel tax will increase by 6 cents to 28.5 cents.

The wholesale fuel tax is estimated to raise $59 million annually.

A two-year transportation budget deal reached early this month in Ohio will raise another $865 million annually via state fuel tax collection.

The budget deal includes increases to the state’s 28-cent tax rate on gas and diesel.

Specifically, the gas tax will increase by 10.5 cents to 38.5 cents. The diesel rate will increase by 19 cents to 47 cents.

Meanwhile, efforts at statehouses around the country continue to pursue additional road revenue at the fuel pump. Here are the states who are working towards raising their gas tax








See Full Details on Each State's Efforts here