Policy Analysis | May 2013

Variable Gasoline Tax Rates

Mikko Lindberg

In the SLC, every state levies taxes on the sale of gasoline and diesel fuel. These taxes can be grouped into three main categories. The first and most common type of gasoline tax is the fixed-rate tax, collected as a flat amount per gallon purchased. Every state except Kentucky levies a fixed-rate tax, and 10 SLC member states rely exclusively on the fixed-rate tax. Some states levy a variable-rate gas tax, usually in combination with a fixed-rate tax. The most common type of variable rate tax is based on the price of gas. Florida levies a second type of variable-rate gas tax: most of the states's gas tax is tied to the Consumer Price Index – the value of a "market basket of goods" purchased by the typical consumer, adjusted for inflation.

Gas Tax Structures in SLC Member States

(click on headers to sort by column)

State Fixed-Rate Excise Tax Tax as Percentage of Price Indexed to Consumer Price Index Relevant Constitution or Statute Section
Alabama Yes No No Amendment 93 (Constitution)
Arkansas Yes No No Sec 26 - 55 - 206
Florida Yes No Yes Title XIV Sec 206.46 (3)
Georgia Yes Yes No Art. III Sec IX Par. VI (Constitution)
Kentucky No Yes No Section 230 (Constitution)
Louisiana Yes No No Art. 7 Sec 27
Mississippi Yes No No Title 27 Ch 055 Sec 11
Missouri Yes No No Art. IV Sec 30B (Constitution)
North Carolina Yes Yes No Sec 136 - 16.8
Oklahoma Yes No No Sec 68 - 500.6(A)(3)
South Carolina Yes No No Sec 12 - 28 - 2725
Tennessee Yes No No Sec 67-3-2001
Texas Yes No No Art. VIII Sec 7a
Virginia Yes No No Sec 58.1-22 - 89
West Virginia Yes Yes No Art. 6 Sec 52 (Constitution)

Sources: Building a Better Gas Tax: How to Fix One of State Government's Least Sustainable Revenue Sources, Institute on Taxation and Economic Policy, December 2011, and Fueling Transportation Finance: A Primer on the Gas Tax, Center on Urban and Metropolitan Policy, The Brookings Institution, March 2003.