New Year Brings Higher Gas Taxes in Some States

Pennsylvania, Virginia and California among the states seeing increased gas taxes in 2015.

January 05, 2015

WASHINGTON – While most Americans are still giddy over the continuing decline in gas prices the past few months, consumers in some states will be seeing higher prices at the pump this year, as new gas taxes take effect in several states around the country.

Wholesale taxes on gasoline and diesel in Pennsylvania will take another step higher, the second of three increases that a sweeping 2013 law imposes over three years to boost funding for highway, road and bridge construction. Beginning January 1, gasoline taxes went up by 9.5 cents per gallon, while diesel taxes rose by 13 cents per gallon for the second straight year, according to the Pennsylvania Department of Revenue. The series of tax and motorist fee increases in the law are designed to raise $2.3 billion a year, primarily to build and repair highways and bridges. A third tax increase will take place in 2017. Pennsylvania is already among the states with the highest fuel taxes.

In Virginia, the state gas tax increased from 11.1 cents per gallon to 16.2 cents per gallon on the first of the year, one step in funding a $6-billion-dollar transportation funding package. Under the legislation, the cents per gallon tax is calculated based upon a percentage of the wholesale price of gasoline on February 20, 2013, increasing the percentage of the wholesale price of gasoline from 3.5% to 5.1%. This new rate will be in effect until June 30, 2015. The state’s diesel tax, however, remains unchanged at 20.2 cents per gallon.

California’s cap-and-trade policy for gasoline and diesel fuel also went into effect on January 1, adding an estimated 10 cents per gallon of fuel, according to California’s Air Resources Board. All industries in California have to pay for carbon credits if they cause carbon emission. Until January 1, refineries have not had to pay. Cap-and-trade revenues from fuel alone are expected to bring in about $1.7 billion to California in the coming year.

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