Some folks are already en route to their long Memorial Day weekend destination. Millions will be flying, with AAA projecting that this holiday's nearly 3.4 million air travelers will surpass pre-pandemic numbers.
But the number of holiday travelers hitting U.S. roads will dwarf all other modes of Memorial Day travel. AAA expects more than 37 million will drive 50 miles or more starting today, Thursday, May 25, through Monday, May 29.
Gas prices are lower this holiday compared to last year, notes AAA, when the national average was more than $4 a gallon. When I made my weekly grocery run earlier this week, the local filling station had regular at $2.999 per gallon.
But despite the lower prices at the pump, car travel this holiday will be shy of pre-pandemic numbers by about 500,000 travelers, estimates AAA.
Gas taxes added cost: As long-time readers of the ol' blog know, state fuel taxes add to pump prices regardless of what other factors might contribute to the per-gallon costs. This Memorial Day weekend, drivers in a baker's dozen jurisdictions will see larger levies on gasoline.
The 12 states that raised gasoline taxes in the second half of 2022 or in 2023, per U.S. Energy Information Administration (EIA) data, are Arkansas, Florida, Georgia, Illinois, Massachusetts, Missouri, Nebraska, New York, North Carolina, Pennsylvania, Utah, and West Virginia. The District of Columbia brings the count to 13.
Minnesota will soon join the gas tax increase club. A transportation package that's awaiting the governor's signature will index the state's gas tax to inflation, a change that could increase the price of fuel by 5 cents per gallon by 2027. The current Minnesota gas tax is 28.5 cents.
In addition, many states ended the fuel-tax holidays they implemented in 2022 when gasoline and diesel prices hit record highs in that year's early summer.
Billions a year in gas taxes: Regardless of whether a state's gas tax went up, held steady, or dropped, the travel and navigation app Gas Buddy says U.S. drivers will pay $78 billion in gasoline taxes this year.
"While most Americans blame oil companies or gas stations for the high price of gasoline, few remember the portion Uncle Sam takes at the gas pump: 18.4 cents on every gallon in federal gas tax. But most states take even more than that and may not disclose at the pump how much tax is charged per gallon, causing motorists to target gas stations or oil companies instead of disclosing they are charging an average of 38.7 cents on every gallon," said Patrick De Haan, head of petroleum analysis at GasBuddy.
The nondisclosure question comes in states that collect a percentage-based sales tax on gasoline. "When gas prices hit a record last year, states saw money rolling in around the clock, in some places more than ever before," said De Haan.
Gas Buddy calculations show that motorists spend $483 million on federal gasoline taxes every week, or $25 billion every year. State fuel taxes amount to $145 million per day, totaling $53 billion per year.
Holidays, like the upcoming Memorial Day break, bump up those usual driving and tax-related costs. If you are on or about to hit the road, be sure your budget takes these tax costs into account.
You also might find these items of interest:
- Europe tacks on larger fuel taxes than the United States
- 2 federal projects announced to improve EV charging options
- SCOTUS refuses tax-related passport case, letting the travel document revocation law stand
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