Fuel Tax Legislation
Since 2013, 32 states and the District of Columbia have enacted legislation to increase gas taxes. Missouri voters’ overrode a gas tax increase on Election Day 2018 and may do the same in 2021.
Thus far in 2021, one state—Colorado— created a new fee on gasoline of eight cents that will be completely phased in by 2028. Beginning in fiscal year 2032 the fee is indexed to the Highway Construction Cost Index inflation.
In 2020, one state—Virginia—and D.C. increased gas taxes. The bill in Virginia raised the gas tax by 10 cents over two years, while also expanding the “wholesale fuel” tax, which previously only applied to portions along Interstate Highway 81 and changed the formula from a percentage basis to a fixed cents-per-gallon (CPG) rate adjusted to annual changes in the Consumer Price Index (CPI). In July 2020, the D.C. Council approved an increase to its motor fuel tax rate, calling it the “Motor Vehicle Fuel Tax Amendment Act of 2020.” This increase will total 10.3 CPG by October 2021. Additionally, the rate will be annually adjusted based on the greater of the annual change in the CPI or zero thereafter.
In 2019, five states—Alabama, Arkansas, Illinois, Ohio and Virginia—enacted gas tax increases, although Virginia's only applied to a portion of the state.
In 2018, Missouri and Oklahoma enacted legislation to increase their motor fuel taxes. However, Missouri’s increase was subject to voter approval due to constitutional limitations on revenue increases. Proposition D failed at the ballot box in November 2018, overriding the legislature's desire to increase the state’s motor fuel tax (see 2018 Voter Action below).
In 2017, seven states—California, Indiana, Montana, South Carolina, Oregon, Tennessee and West Virginia—passed legislation to increase fuel taxes. Additionally, Utah enacted measures to accelerate the motor fuel tax indexing provisions implemented in the state’s 2015 fuel tax legislation, likely leading to a fuel tax increase in subsequent years.
New Jersey was the only state to enact legislation to increase state fuel taxes in 2016, following a much more active 2015 in which eight states—Georgia, Idaho, Iowa, Michigan, Nebraska, South Dakota, Utah and Washington—passed legislation to increase fuel taxes, and two more states—Kentucky and North Carolina—altered the structure of their taxes in order to limit decreasing revenues.
In 2014, lawmakers in Michigan (later overturned by voters), New Hampshire and Rhode Island enacted fuel tax legislation. In 2013, six states—Maryland, Massachusetts, Pennsylvania, Vermont, Virginia and Wyoming—and D.C. did the same.
No state legislature approved an increase to fuel taxes in 2010, 2011 or 2012. Summaries of the bills are below, with links to bill information on the relevant state legislative websites. Additional details are available at NCSL’s Transportation Funding and Finance Legislation Database. Note that this list does not include those states that, because of indexing or other mechanisms, automatically altered their gas taxes during this time frame without legislative action.