- Gas and diesel taxes went up in a handful of US states on July 1.
- Those increases are happening in California, Connecticut, Illinois, Indiana, Maryland, Michigan, Montana, Nebraska, Ohio, Rhode Island, South Carolina, Tennessee, and Vermont.
- There are various reasons for the hikes, depending on the state, but they are primarily meant to help fund maintenance and improvements for roads, bridges and other infrastructure around the country.
- Visit Business Insider’s homepage for more stories.
Gas and diesel taxes have risen in 12 states, most prominently in Illinois, Ohio, and California.
Connecticut, Indiana, Maryland, Michigan, Montana, Nebraska, Rhode Island, South Carolina, Tennessee, and Vermont have also implemented hikes. There are various reasons for the increases, depending on the state, but they are primarily meant to help fund maintenance and improvements for roads, bridges and other transportation infrastructure around the country.
For some states, the gas tax increase has been long delayed. Some states have postponed this increase for several years due to the political challenges, Carl Davis, a research director at the Institute of Taxation and Economic Policy, told Business Insider. Davis is an expert in transportation infrastructure funding.
“Lawmakers don’t want to take a vote to raise the price of gas, but at the same time, drivers don’t want to drive over an unsafe bridge or hit a pothole or be stuck in a traffic congestion,” Davis said. “There are inevitable tradeoffs here, and navigating these tradeoffs can be tricky.”
These are the states that have increased their gas tax rates:
California
California's gas tax increased by 5.6 cents per gallon to a total of 47.3 cents per gallon. This was the final increase from a 2017 bill that was created to help pay for infrastructure improvements. The gas tax rate will now be adjusted for inflation on an annual basis.
Connecticut
The tax rate on diesel fuel jumped 2.6 cents, bringing it to a total of 46.5 cents per gallon. This is still lower than the state's 2013 peak of 54.9 cents.
Illinois
The gas tax in Connecticut is up 19 cents, doubling the previous tax for a total of 38 cents per gallon. The diesel tax increased by 24 cents to nearly 46 cents per gallon.
Indiana
Gas taxes in the Hoosier State increased 0.5 cents per gallon, and diesel will increase by a penny per gallon.
According to the Institute on Taxation and Economic Policy, in Indiana, both of these taxes "are updated annually to keep pace with inflation and the rate of personal income growth in Indiana."
Maryland
Gas and diesel taxes increased 1.4 cents to a total of 36.7 cents per gallon. The change is due to a 2013 formula which increases the tax rate in accordance with inflation and fuel prices.
Michigan
The taxes increased by 0.1 cents for gas and 0.2 cents for diesel. The tax rates differ each month, depending on the price of fuel.
Montana
Gas taxes rose by 0.5 cents, while diesel rose by 0.2 cents. Both increases are the result of 2017 legislation that will spur incremental gas tax hikes through July 2022.
Nebraska
Tax rates for both gas and diesel rose by 0.1 cents.
Ohio
Gas taxes rose by 10.5 cents per gallon in Ohio, while diesel rose by 19 cents to a total of 47 cents per gallon.
Rhode Island
Drivers in Rhode Island got a one-cent tax increase on gas and diesel in the state, for a total tax of 34 cents per gallon. It's the first gas-tax hike since July 2015, the Institute on Taxation and Economic Policy said.
South Carolina
Taxes on gas and diesel rose by two cents per gallon on July 1. The increase is the third installment of a six-part series of tax hikes implemented in 2017.
Tennessee
The gas tax rose by one cent on July 1, while diesel rose by three cents.
Vermont
The gas tax in Vermont increased by 0.55 cents. The tax rate on diesel is unchanged.
