Mid-Year Fuel Tax Changes
The second most popular day of the year for laws and regulations to go into effect is July 1st, the most popular being the start of a new year. Thirteen states have updated their fuel taxes for the midpoint of 2025. Here is what that entails.
Details
To avoid being repetitive, all prices are per-gallon.
There are three states that had excise tax decreases for diesel fuel. Those are Connecticut (52.4 to 48.9 cents), Kentucky (23.4 to 22 cents), and Maryland (about .25 cents).
Meanwhile ten states have increased their fuel excise taxes. They are:
- Alabama (30 to 31).
- California (45.4 to 46.6).
- Illinois (54.5 to 55.8).
- Indiana (59 to 61).
- Mississippi (18 to 21).
- Missouri (27 to 29.5).
- Nebraska (30.4 to 31.8).
- Rhode Island (37 to 40).
- Virginia (31.8 to 32.7).
- Washington (a whopping increase from 9 cents to 58.4 cents).
Conclusion
Likely, you already know the drill of how this works. These taxes are supposed to be a flat consumption tax (you drive more, you use more fuel, you pay more tax), and the money goes towards infrastructure (such as bridges) and road repair. With the advent of electric and other alternative fuel vehicles as well as increased fuel efficiency, state governments have been receiving less excise tax throughout the years, and increasing the excise tax to get more money per mile. The turning of the screws is small enough (in all cases but Washington, a change of five cents or less) that it would not motivate any major changes in driving habits, such as switching to alternative fuels, although some states such as Connecticut have already planned ahead for that with a vehicle-miles traveled tax.
Funnily enough, prices for fuel in some regions of the nation are lower than they were at the start of 2025 even with the fuel excise taxes included, thanks to an increase of supply for the various forms of black gold. It appears that the Trump mantra of “Drill, Baby, Drill” will lead to better roads for all, assuming the tax money collected is used appropriately.
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