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How do states determine the amount of a fuel tax?

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Quick Answer

States calculate their fuel taxes by combining their fuel excise tax, other state and local taxes and the federal fuel excise tax, according to the American Petroleum Institute. While the federal tax is the same across the country, the state excise tax and other taxes vary.

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Full Answer

As of July 1, 2015, the average tax on gasoline was 48.88 cents per gallon, says the American Petroleum Institute. For diesel fuel, the average was 54.49 cents a gallon. Both are slight increases from three months earlier. For gasoline, 18.4 cents comes federal taxes and 30.48 cents come from the combined state excise tax and other state taxes. For diesel, federal tax accounts 24.4 cents a gallon, while the combined state and local taxes make up the remaining 30.09 cents.

Nationwide, the highest fuel taxes are found in the Western states, while the lowest taxes are in the South. Pennsylvania has the highest fuel taxes at 70 cents per gallon for gas and 89.7 cents a gallon for diesel, closely followed by New York (69.5 cents a gallon on gasoline and 64.39 cents a gallon on diesel). The lowest fuel taxes are in Alaska where the rates are 29.7 cents a gallon for gas and 36.2 cents per gallon for diesel.

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