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Gasoline tax considerations for Memorial Day travel


The coming Memorial Day break is seen as the unofficial start of summer in the United States. It’s also usually been the start of higher summer gasoline prices.

That’s not the case this year. So far.

Pump prices rose nationwide this spring, but actually have fallen a tad recently. Today’s AAA national average of a gallon of regular gasoline was $3.598. That was up a smidge (0.008) from yesterday, May 20, but less than the $3.612 recorded a week ago.

Record road trips: Will the lower gas prices hold? An expected record number of drivers hope so, at least until they complete their holiday travels.

AAA projects that around 44 million people will head out for Memorial Day excursions, making it the second highest travel forecast for the holiday since AAA began tracking in 2000.


Most of those travelers, more than 38.4 million, will hit the country’s roads. If that happens, says AAA, it will set a record. The forecast number of drivers this year is up 4 percent compared to last year, and 1.9 percent higher than in 2019.

“We haven’t seen Memorial Day weekend travel numbers like these in almost 20 years,” said Paula Twidale, Senior Vice President of AAA Travel. They indicate, added Twidale, “a very busy summer travel season ahead.”

The prices they pay for their highway travel will depend, of course, on how far and where they are going.

AAA’s data as of May 16 showed that the nation’s top 10 most expensive markets were California ($5.24), Hawaii ($4.80), Washington ($4.62), Nevada ($4.40), Oregon ($4.40), Alaska ($4.34), Arizona ($3.92), Illinois ($3.89), Idaho ($3.83), and Pennsylvania ($3.75).

Fuel tax role in pump prices: As long-time readers know, taxes contribute to the cost of topping off your tanks.

The federal while the federal gas tax has been fixed at 18.4 cents since 1993. States, however, have been making changes over these last 31 years.

The reason for the states’ moves is that drivers, also known as voters, let lawmakers known when local infrastructure, which is the recipient of most gas tax revenue, is in need of repair.

So, just what does your state treasury collect when you fill up your car, truck, or motorcycle? The Tax Foundation map below offers a visual overview of how state fuel taxes compared last summer.


Variable gas tax calculations: While, as the map above shows, all 50 states and Washington, D.C., levy some form of a gasoline tax.

How do these come up with the amounts. Now, almost half of the states and the District of Columbia use a variable-rate gas tax that adjusts, to some degree, with inflation or prices without regular legislative action.

Below, per the National Conference of State Legislatures (NCSL), are the 25 places with adjustable gasoline taxes.


Gas Tax Structure


Tax indexed annually to the National Highway Construction Cost.


Tax based on the average wholesale price of gas and diesel, with a floor (prevents the tax from dropping if the 12-month average wholesale price of fuel is less than the previous year) and a ceiling (limits the increase to no more than 0.1 cents per gallon, or CPG).


Tax varies with inflation.


Beginning in fiscal year 2032-33 the 8 cent road user fee, which is levied on gasoline, will be indexed to Highway Construction Cost Index inflation.


Tax varies with gas prices.


Tax varies with the Consumer Price Index (CPI).


Tax varies with vehicle fuel-efficiency and CPI.


Variable rate only because general sales tax applies to gas.


Tax varies with CPI.


Tax varies with inflation and general sales tax applies to gas.


Tax varies with gas prices.


Tax varies with gas prices and CPI.


Tax varies with inflation.


Tax varies annually with increases in the Minnesota Highway Construction Cost Index. The rate will be 28.3 cents in 2024.


Tax varies with gas prices and appropriation decisions.

New Jersey

Tax varies with gas prices and revenue collection.

New York

Tax varies with gas prices.

North Carolina

Tax varies with population and CPI.


Tax varies with gas prices.

Rhode Island

Tax varies with CPI.


Tax varies with gas prices and CPI.


Tax varies with gas prices.


Tax varies with CPI.

West Virginia

Tax varies with gas prices.

Washington, D.C.

Tax varies with CPI.

EV threat to gas tax revenue:
One of the reasons states tie gasoline taxes to inflation is to help recoup billions of dollars in highway fund revenue they’ve lost over the past decade to fuel-efficient, hybrid, and electric automobiles, writes Sean Salai in a recent The Washington Times article.

“Transportation departments are in a bind because EVs [electric vehicles] are much heavier than gas-powered vehicles and do far more damage to roads and bridges,” Bonner R. Cohen, a senior fellow at the National Center for Public Policy Research, told Salai.

Other states are adding specific fees for alternative fuel autos. Texas joined the EV fee club last September.

And the possibility of per-mile tax for EVs or all vehicles is being floated, or tested in pilot programs, in states and at the federal level.

But all these tax options can wait until you get back from your summer kick-off vacation.

If you’re taking a road trip on Memorial Day, here’s hoping you can find some cheap gas. And if you’re in an EV, here’s to finding available charging stations.

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