Taxes on fuel vary by state

Florida fuel tax to increase on Jan. 1

Posted 12/27/22

Why does gasoline cost more in one state than another?

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Taxes on fuel vary by state

Florida fuel tax to increase on Jan. 1


Why does gasoline cost more in one state than another? Travelers are often surprised to find gasoline in a neighboring state is much less or more expensive than what they pay at home.

Part of the difference is the state taxes on gasoline and diesel. These taxes are used to build and repair roads and bridges.

In 2022, California had the highest state tax on fuel, at 68 cents per gallon. Alaska had the lowest tax, at 14 cents per gallon.

Florida’s state excise tax on fuel is currently 19 cents per gallon. In 2023, Florida’s excise tax on gasoline and diesel will increase by 1.2 cents per gallon as part of an automatic inflation adjustment that is written into the state law. This will bring the tax to 20.2 cents per gallon.

In addition to the 20.2 cents per gallon of state fuel taxes collected at the loading rack, terminal suppliers must collect a minimum local option fuel tax of 14.9 cents per gallon, a pollutants tax of 2.071 cents per gallon, and an inspection fee of 0.125 cents per gallon on each gallon of motor fuel sold to licensed wholesalers, according to the Florida Department of Revenue. Total Florida fuel taxes collected by terminal suppliers on sales of motor fuel to licensed wholesalers is 37.296 cents per gallon.

Pennsylvania’s gas tax, already one the highest in the nation, will also go up in January, from 58 cents to 61 cents per gallon. The state’s diesel tax will increase from 74 cents to 78.5 cents per gallon. Connecticut, Illinois, Michigan, New York North Carolina and Utah will also increase gas taxes on Jan. 1.

The Florida Department of Revenue (FDOR) is responsible for administering fuel taxes for the state of Florida. For purposes of tax administration, fuel is defined as motor, diesel, aviation, or natural gas fuel.

According to FDOR, fuel tax is imposed on the ultimate consumer, but pre-collected for administrative convenience. The tax rates assessed on fuel are adjusted each year and are valid from Jan. 1 to Dec. 31. Fuel tax is due each month and includes the inspection fee, state tax, local option tax, and pollutants tax. 

There is also a federal tax, which funds road construction which some money designated for mass transit. The United States federal excise tax on gasoline is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel.

gasoline tax, state tax, Florida