The first of July will mark the start of many states’ fiscal years 2023, which will see the implementation of planned increases in gas taxes. Gov. Andy Beshear issued an executive order suspending the increase through January 2023 in Kentucky, which was originally intended to be one of them.
Beshear estimated that the decision will save Kentuckians $35.4 million, with the Transportation Cabinet Road Fund making up the revenue lost.
These are the states that have raised their gas taxes thus far this year. Discover which states have suspended their gas taxes, which are offering gas rebates to citizens, and what actions motorists can take to increase their gas mileage to learn more about the gasoline crisis.
California
Gov. Gavin Newsom was able to repeal California’s diesel fuel tax as part of a deal with state legislators, but he was powerless to stop a 2.8-cent increase in the state’s gas excise tax, which took effect on July 1 and made it the highest in the country at 53.9 cents per gallon.
It is not shocking that Californians pay the highest gas prices of any state, at about $6.15 per gallon as of July 8. Although down from the $6.39 mark reached one month prior, that is still significantly higher than the $4.72 national average.
Democratic lawmakers insisted that the gas tax must remain in place because it funds important infrastructure and road projects, despite Newsom’s desire to suspend it.
He then suggested a $400 cash rebate for every household with up to two registered cars in the state. Residents will instead receive “inflation relief” checks totaling up to $1,050 per family in place of the diesel tax suspension.
Connecticut
The diesel tax in Connecticut increased by nearly 23 percent on July 1 from 40.1 cents to 49.2 cents per gallon. According to the Connecticut Mirror, the increase comes six months before the state is supposed to enact a new highway use tax on big commercial trucks that is expected to bring in $90 million annually.
In Connecticut, the price of diesel increased by almost 20% in the previous 12 months, from $3.30 in July 2021 to $6.19 in early June 2022. On July 8, it was reduced to $5.94 per gallon.
Republican lawmakers claim that the two-pronged attack will only make inflation worse. The entire diesel tax, including the increase, is to be suspended, and a special session of the legislature has been called.
Illinois
To pay for road improvements, Illinois lawmakers and Governor J.B. Pritzker doubled the state’s gas tax in 2019, raising it from 19 cents per gallon to 38 cents. After Pennsylvanians, who pay 58 cents per gallon, and Californians, who pay 53.9 cents, Illinoisans now pay the third-highest gas taxes in the country.
Since then, the excise has gradually increased to 39.2 cents per gallon, and on July 1 it was expected to increase once more to 41.1 cents. Pritzker, however, decided to postpone the increase until the end of the year. (He has even mandated that gas stations promote the pause or face a heavy fine.)
Instead, there will be two fuel tax increases in 2023: the first, which is delayed, will begin on January 1 and the second, which is annual, will begin on July 1. Together, these increases will raise the gas excise to 45.2 cents per gallon.
Illinois’s average price for a gallon of gas on July 8 was $5.20.
Indiana
According to the Indiana Department of Revenue, drivers in Indiana are now paying 62 cents per gallon in gasoline taxes, up from a record high of 56 cents per gallon in June.
In reality, the state levies two separate taxes on gasoline: a sales tax of 7% and a 32-cent-per-gallon tax intended to pay for road improvements.
According to WFYI, the monthly sales tax has recently increased to 29.1 cents per gallon, an increase of more than 5 cents from June and more than triple what it was in early 2021. The infrastructure excise was increased by 1 cent per gallon as a result of inflation.
Unleaded gasoline had a national average price per gallon on July 8 of $4.72 in Indiana.
Maryland
From March 18 to April 16, Maryland’s 36.1-cent per gallon gasoline tax was suspended. However, once it had resumed, the price per gallon actually increased on July 1 by almost 7 cents to 42.7 cents. The state law-mandated automatic annual increase is to blame for the 18% increase.
According to Baltimore station Fox 45, State Comptroller Peter Franchot has called for another three-month gas tax holiday, saving a household with two cars more than $150.
In Maryland, the average price of a gallon of unleaded fuel on July 8 was $4.65.
Missouri
Missouri lawmakers passed legislation in October that will gradually raise the state’s gas tax by 12.5 cents by July 2025 after leaving it unchanged for almost 25 years.
The tax increased by 2.5 cents to 17 cents in October. On July 1, it increased by a further 2.5 cents to 19.5 cents. The retail gas tax will cost 29.5 cents per gallon by the deadline of 2025.
According to KSDK in St. Louis, the state will ultimately receive an estimated $500 million from the increased tax for infrastructure projects. However, the majority of drivers will receive a full refund of the increase if they keep their receipts and upload them to the website of the Missouri Department of Revenue. From October 2021 through June, drivers can begin submitting their gas receipts.
According to AAA, the price of gas in Missouri on July 5 averaged $4.45 per gallon.
Carolina, South
In order to pass a 2 cent per gallon increase in the state’s gas tax every year through 2022, the South Carolina legislature overrode the veto of Republican governor Henry McMasters in 2017.
The tax was finally increased on July 1 from 26 to 28 cents per gallon.
The South Carolina Department of Transportation estimates that the tax brought in close to $900 million for the state through March 2022. The money is used to build bridges and roads.
South Carolina’s average gas price as of July 8 was $4.23, significantly less than the $4.72 national average.
Virginia
Virginia’s gas tax increased by 7% on July 1 as a result of legislation that Governor Ralph Northam signed in 2020 to raise money for road improvements.
The increase brings the excise from 26.2 cents per gallon to 28 cents, or about 2 cents per gallon.
It might take some time before consumers notice the price difference at the pump, Virginia Petroleum and Convenience Marketers Association president Michael O’Conner told WSET on June 30.
It will take time for the product to move through the system and be sold at retail, according to O’Conner. “The gas that’s in the stations today [Thursday] will be taxed at the old rate,” he said. Therefore, it’s unlikely that change will be noticeable right away.
Sen. Steve Newman’s proposal to suspend the state’s gas tax for three months was defeated in June.
According to AAA, the cost of a gallon of unleaded in Virginia on July 8 averaged $4.51.
