Some States Mull Gas Tax Relief After Price Spike

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That’s how many state legislatures are considering (or have already enacted) some sort of gas tax relief after the Russian invasion of Ukraine triggered sharp price increases at the pump.

Maryland and Georgia have already enacted laws, while 16 other states—including California, Florida. and New York—are discussing some form of state-level tax relief, according to a March 21 memo from the National Conference of State Legislatures. These include tax suspensions, tax reductions. and temporary freezes on planned taxes.

States levy gas taxes and fees in multiple ways, making for a wide range of tax rates that can contribute—along with the distance from refineries and environmental regulations—to significant price disparities across state lines. For instance, tax rates are one reason California drivers pay, on average, $5.87 a gallon, over $2 more than Oklahoma motorists.

While gas prices have fallen a little from their recent peaks, the national average on Tuesday was still $4.24 a gallon, about 70 cents higher than it was at the start of the Ukraine war less than a month ago, according to AAA. Sanctions and other deterrents to buying oil from Russia, a major producer, rocked the oil market, sending the price of gas and the oil it’s made from surging. 

Maryland waived gasoline taxes for 30 days, while Georgia suspended its gallon excise tax through May 31, according to the National Conference of State Legislatures. Other proposals would last longer, from six months in California and Missouri, to two years in Idaho, Illinois, and Indiana.

Have a question, comment, or story to share? You can reach Terry at tlane@thebalance.com.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Federation of Tax Administrators. “2022 State Motor Fuel Excise Tax Rate - January 1, 2022.”

  2. Tax Foundation. “How High are Gas Taxes in Your State?

  3. AAA. “AAA Gas Prices.”

  4. Energy Information Administration. “Crude Oil Prices Rise Above $100 Per Barrel After Russia's Further Invasion into Ukraine - Today in Energy.”

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