Little Bits of History

Gas Tax

Posted in History by patriciahysell on February 25, 2013
Gas pump

Gas pump

February 25, 1919: Oregon becomes the first state to impose a gasoline tax at the rate of 1¢/gallon. Eventually all 48 states and the District of Columbia levied their own version of this revenue enhancing scheme. By 1932, a federal gasoline tax was further added at the same rate of 1¢/gallon. US citizens are currently paying a federal tax of 18.4¢/gallon as well as taxes paid to the state. Maine charges drivers 27.6¢/gallon while Alaska tacks on only 8¢/gallon. Gasoline tax in the US is dedicated to transportation – road construction and maintenance or mass transit subsidies.

This form of revenue is used by other governments as well. Canada has both federal and provincial rates of taxation. As an added bonus, some municipalities also tax the fuel. In the Yukon 16.2¢/L (60¢/gallon) is the tax while in Vancouver it is 30.5¢/L ($1.142/gallon). The federal government takes 10¢/L (37¢/gallon) in taxes and the average Canadian fuel tax is 31.9¢/L or $1.195/gallon. Diesel and aviation fuels are taxed at lower rates.

Australia has several different rates for different types of fuels and there are grants possible to reduce or remove certain fuel taxes. In the UK, road fuels are taxed at £0.5035/L with a £0.2 reduction for biodiesel and bioethenol. However, there is a VAT (Value Added Tax) also imposed at 17.5% on the fuel and on the tax. All these combined taxes account for 65.24p/L or $5.043/gallon. The Netherlands has a fuel tax that is now specifically set aside for road creation and road and public transport maintenance at the rate of €0.684/L or $3.50/gallon (as of 2007).

Germany adds 65.45 Euro-Cents/L for conventional unleaded petrol. They then add 19% VAT to the fuel and the Fuel Tax which adds up to a whopping €1.37/L or $7.615/gallon (September 2007 figures). All this taxation leads many drivers on The Continent to cross borders to fill their tanks in a cheaper country. In China, the National People’s Congress has exerted enough pressure on the government to make them forego this type of income – so far.

“Like mothers, taxes are often misunderstood but seldom forgotten.” – Lord Bramwell

“The point to remember is what the government gives it must first take away.” – John S. Coleman

“Taxes are not levied for the benefit of the taxed.” – Robert A. Heinlein

“All money nowadays seems to be produced with a natural homing instinct for the Treasury.” – Prince Phillip

This article first appeared at Examiner.com in 2010. Editor’s update: In the US, the federal tax on gasoline remains at 18.4¢/gallon. It was last raised in 1993 and is not tied to inflation. State taxes vary and add on average, about 50¢/gallon. Diesel fuel is taxed at a different rate and the feds add 24.4¢ to each gallon. As of October 2012, the state with the lowest additional tax was still Alaska with a rate of 26.4¢ per gallon for gas and 32,4¢/gallon of diesel. They were they only state in the twenty-cent range. There were fourteen states who added in 30-39¢/gallon and 21 states tacked on 40-49¢. Nine more states added 50-59¢/gallon and the remaining states added 60-69¢ with New York adding the most at 69¢/gallon. Monies collected by this tax are used for the transportation infrastructure.

Also on this day: “Do you feel lucky?” – In 1836, Samuel Colt received a patent for his new revolver.
Cut Off – In 1570, Pope Pius V excommunicated Queen Elizabeth I.
Battle Stations – In 1942, Los Angeles was under fire.

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  1. Bobby Dias said, on February 25, 2013 at 9:24 am

    Most local and state and federal gas taxes were levied to put that industry on a level with others that were paying a inventory or property tax on their commodities and real estate- not actually picking on the gas companies but as what was and still is a taxation system of each government on Earth. My mother’s father told me of his fight to have the oil companies pay taxes to be close to agriculture land in California in the early 1900s so that farmland would not be put to oil extraction use to the detriment of the agriculture people and therebye to the people of California. The federal gas tax was started by Congress to basically slow down the oil industry while having some extra revenue-not much extra revenue at first but substantial later.


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