Fuel tax increases in five states go in effect for 2019

December 28, 2018

Keith Goble


States around the nation are ringing in the new year with notable fuel tax increases.

During the past year, more than a dozen states have instituted fuel tax increases. Adjustments range from increases of 6 cents per gallon for diesel in Oklahoma to fractional changes in other states.

The most notable change for the beginning of 2019 is slated for Utah, where the state’s excise tax rate of 29.4 cents per gallon on gas and diesel fuel is on the way up.

A 2015 state law authorized a nickel fuel tax increase. The law included a component to turn the excise rate into a sales tax, which allows for regular increases. As a result, the first of the year marks an increase in the tax rate by 0.6 cents to 30 cents per gallon.

The state of Nebraska has implemented another round of fuel tax increases. The change marks the final of a four-step increase over four years. The state’s 28-cent-per-gallon fuel tax increased by 1.6 cents to 29.6 cents. The tax rate has increased nearly 6 cents from 2016.

The state tax is made up of three components: the 3.5-cent variable tax, the 14.8-cent fixed tax and the 9.7-cent wholesale tax. The variable and wholesale rates are adjusted twice annually.

A separate petroleum release remedial action fee is not included in the state tax rates and remains unchanged at 0.9 cents per gallon on gas and at 0.3 cents on diesel.

In North Carolina, fuel tax increases continue. A 2015 state law implemented a new fuel tax formula adjusted annually. The formula is based on a statutory formula that takes into consideration state population and energy cost inflation.

Since the first adjustment two years ago the tax rate has increased from 34.3 cents to 36.2 cents. The rate is up 1.1 cent from 35.1 cents in January 2018.

Automatic adjustments to the fuel tax also resulted in modest increases in neighboring Georgia and in Florida.

The Georgia tax rate is up from 26.8 cents for gas and 30 cents for diesel to 27.5 and 30.8 cents, respectively.

Florida’s total state and county rates on diesel will increase from 32.3 cents per gallon to 32.9 cents. The total tax on gas will be 32 cents – up from 31.4 cents.

Elsewhere, modest changes of likely one penny or less are expected in states that include Indiana, Iowa, New York and West Virginia. The changes are based on automatic adjustments.

States with automatic adjustments are due to tax rates calculated by percentage of fuel price in addition to a flat excise tax, fuel tax calculated by percentage of fuel price, indexed to Consumer Price Index, and/or other means.

Some states with automatic adjustments are implemented annually while others change more frequently.