18 states and D.C. use variable-rate gas tax for highway, bridge projects

Updated Mar 2, 2015

Filling-gas-tank_BWS1366The latest report from the Transportation Investment Advocacy Center (TIAC) shows that 18 states and the District of Columbia use variable-rate gas taxes to fund highway and bridge improvement projects.

Such taxes adjust to inflation and the wholesale price of gas, rather than relying the static nature of a flat excise tax.

The American Road & Transportation Builders Association operates TIAC, which provides case studies of transportation funding campaigns.

According to the report, of the 18 states with a variable tax, nine also have a flat tax as well as a percentage-based tax on wholesale gas prices. These states include California, Connecticut, Georgia, Indiana, Nebraska, New York, North Carolina, Vermont, and West Virginia.

Kentucky and Virginia use only a percentage of the wholesale price of gas, TIAC stated. Pennsylvania will do the same beginning January 2017. Florida and Rhode Island use the Consumer Price Index for economic changes, and Maryland uses both the COI and the wholesale price of gas for its tax.

Nebraska also recalculates the tax “in order to sufficiently make payments on state highway improvement bonds.” Hawaii, Michigan, and Illinois have a general state sales tax, use tax, and a flat excise tax. New Jersey has a petroleum gross receipts tax for “either the sale of petroleum products or the gross receipts of the petroleum company.”

The full report is available here.