Eight states impose fuel tax changes July 1

June 23, 2023

Keith Goble


The first of July marks the start date of fuel tax rate changes in states around the country.

Automatic tax rate changes range from a 4.3-cent increase in Maryland to a nearly 2-cent dip in Utah.


Another round of fuel rate increases in California takes effect the first of the month. The increases are to keep up with inflation.

Excise tax collected on gas purchases has been set at 53.9 cents and the diesel rate at 41 cents. As of July 1, the excise tax on gas is up 4 cents per gallon to 57.9 cents.

The diesel excise tax in the Golden State is up 3.1 cents per gallon to 44.1 cents.

Gov. Gavin Newsom has pointed the finger at oil companies as the reason for the state’s high fuel prices.

He acted earlier this year to sign into law a bill to implement price gouging rules for oil companies. The new rule takes effect Monday, June 26.


For the second time this year, fuel tax rates in Illinois are on their way up.

On Jan. 1, a cost-of-living adjustment took effect in the state. As a result, the state excise rates on gas and diesel increased by 3.1 cents to 42.3 cents and 49.8 cents.

The increase was scheduled to take effect last July but it was delayed for six months. Gov. J.B. Pritzker cited rising inflation and high fuel prices nationwide for the tax freeze.

The next regularly scheduled increase will kick in July 1. At that time, gas and diesel excise rates will increase by another 3.1 cents to 45.4 cents and 52.9 cents.

The diesel excise rate is the third highest in the nation behind Indiana and Pennsylvania.


A scheduled increase is also set to take effect in Indiana.

The excise rates on gas and diesel now are set at 33 cents and 55 cents, respectively. Starting July 1, the rates will each increase by a penny to 34 cents and 56 cents.

The changes are tied to a 6-year-old law that called for annual rate adjustments through 2024. Adjustments made each July 1 are capped at one penny.

With the expiration date looming, state lawmakers acted this year to send to the governor a lengthy transportation bill that included a provision to keep the adjustments in place through 2027.

Gov. Eric Holcomb signed the bill into law.


The state of Kentucky will also start collecting more fuel tax the first of the month.

The gas and diesel rates now are 26 cents and 23 cents.

Kentucky Gov. Andy Beshear acted a year ago to freeze the state’s fuel tax rates. At the time, he cited rising prices and inflation.

Statute links the state fuel taxes to the average wholesale price of fuel. As a result, when the price goes up, the tax rate follows.

The freeze has since sunset. As a result, both tax rates are set to increase by 2.1 cents to 28.1 cents and 25.1 cents.


Fuel tax rates in Maryland are on the rise. Specifically, the gas tax and the diesel tax will each increase by 4.3 cents.

The changes set for the first of the month are due to a decade-old inflation indexing law. Maryland law authorizes fuel rates to be adjusted each July based on the consumer price index.

As a result, the gas tax will increase from 42.7 cents to 47 cents. The diesel rate will be raised from 43.45 cents to 47.75 cents.

Both tax rates are up 10.9 cents over two years.


In Missouri, the first of the month marks the third of five annual increases to the state’s fuel tax rate.

A 2021 law put in place regular increases to the state’s then 17-cent fuel tax rate. The tax is slated to increase by 12.5 cents to 29.5 cents through July 2025.

The first 2.5-cent increase took effect in October 2021. The second increase took effect last July. The third increase of the same amount takes effect on July 1. At that time, the gas and diesel rate will be set at 24.5 cents.

Missouri motorists are permitted to file refund claims for reimbursement of the additional tax amounts.

A statehouse pursuit failed to gain passage this year that would have extended the refund offering to all Missouri vehicle owners, including truck drivers.


Utah is bucking the trend nationally of fuel tax rate increases.

As a result of a tax cut enacted this year by Gov. Spencer Cox, the state’s fuel tax rate will dip the first of the month.

Utah now charges a 36.4-cent tax on gas and diesel purchases. The rate is up 4.5 cents from a year ago.

The Utah Tax Commission adjusts the fuel tax rate each July. The commission recalculates the rate by charging 16.5% of the average motor fuel price charged by refineries to retailers at the rack.

The new law changes the calculation of the fuel tax.

The fuel tax provision lowers the fuel tax rate to 34.5 cents starting July 1. The change will result from dropping the rack rate from 16.5% to 14.2%.

Rates increases will be staggered through 2028 when it is expected to be as much as 42 cents per gallon.

The change is estimated to reduce state tax revenues by about $35.4 million in fiscal year 2024. Another $31 million loss is anticipated the following year.

To help cover revenue loss, the new law adds a 12.5% tax on electricity from electric vehicle charging stations.


Virginia’s gas and diesel excise rates are up the first of the month. The 28-cent excise rate on gas will increase by 1.8 cents to 29.8 cents.

The 28.9-cent diesel rate will be raised to 30.8 cents.

Additionally, the wholesale tax on fuels is also increasing. The gas rate will increase from 8.2 cents to 8.8 cents. The diesel rate will rise from 8.3 cents to 8.9 cents.

The combined taxes will bring the state’s gas tax to 38.6 cents and the diesel tax to 39.7 cents.

The tax rate changes are due to indexing to annual changes in the consumer price index. LL

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