A lot of people travel for the 4th of July. AAA estimates that more than 50 million people will drive at least 50 for the holiday weekend — that means a lot of gasoline usage. And although the average price for the U.S. of a gallon of regular gas has trended down since last week, gas taxes will increase in several states just as the Independence Day weekend begins.
Where Gas Taxes Increase July 1
Here’s what you need to know and where you can expect to start paying more at the pump beginning Saturday, July 1.
California
In California, gas tax goes up July 1, from 53.9 cents to 57.9 cents per gallon. There's usally a gas tax increase in California in July, so many residents are used to it and may or may not be caught off guard.
However, California gas prices remain high relative to those in the rest of the country. (Although, Washington state's gas prices recently surpassed gas prices in California.)
AAA puts the average gas price in California at about $4.82 going into the holiday weekend — that’s without the 3-cent gas tax increase.
Colorado
A road usage fee in Colorado kicks in this weekend. As a result, on July 1, Coloradans can expect an increase in gas tax from $.02 a gallon to $.03. Tax on gas in Colorado is currently 22 cents per gallon of regular gas. According to AAA, gas prices in Colorado averaged $3.68 per gallon this week.
There had been some talk in Colorado about eliminating the gas tax hike. However, Colorado Gov. Jared Polis, who suspended gas tax increases in the state last year, did not retain the gas tax relief in this year’s budget.
However, an increase in Colorado's EV tax credit goes into effect on July 1 as well.
Illinois
Illinois gas taxes go up by just over 3 cents per gallon on July 1. The state’s motor fuel tax will go from about $0.42 to $0.45 per gallon of regular gas. The Illinois gas tax increase was delayed by the Gov. JB Pritzker last summer, and Illinois residents also enjoyed a one-year suspension of grocery taxes. Both taxes return this weekend.
Illinois motor field taxes are among the highest in the U.S. This gas tax increase will be the second one in Illinois this year. (Last year’s increase was delayed until January of this year and the July increase is automatic.)
Indiana
Indiana’s gas tax goes from 33 to 34 cents per gallon this weekend. According to AAA, Indiana gas prices for a gallon of regular gas average $3.37. Drivers in the Hoosier State aren’t strangers to gas tax increases each year, Indiana residents now pay about double in gas tax than what they paid in 2017.
But, in other tax news, Indiana passed legislation to eventually cut its 3.23% income tax rate down in 2023 to 2.9%. The move is part of a $1.1 billion tax package signed into law by Gov. Eric Holcomb.
Iowa
Iowa’s July 1 tax increase is relatively small compared to other states at $.05 (from 24 cents to 24.5) cents per gallon on ethanol and ethanol-gas blends.
EV charging will also cost more in the state this year. Beginning this weekend, a new 2.6-cent per kilowatt/hour excise tax is levied on non-residential EV charging in Iowa. So electric vehicle drivers in Iowa will see an increase in that sales tax.
Kentucky
Beginning July 1, the gas tax in Kentucky is 28.7 cents per gallon of regular gasoline. That’s up about two cents (from 26.6) per gallon. Gov. Andy Beshear issued an emergency declaration last year, which froze gas prices, but that protection has expired.
Gas tax revenue in Kentucky goes to the Kentucky Road Fund, which funds the construction and maintenance of Kentucky roads. AAA puts this week’s average price of a gallon of regular gas in Kentucky (pre-increase) at $3.28.
Maryland
The gas tax in Maryland is going up 5 cents per gallon from 42.7 cents to 47 cents. (That’s more than 10% compared to the previous gas tax rate in the state.) Although significant, the gas tax increase in Maryland was expected. As is typical in other states, Maryland’s gas tax revenue is used to fund state road and highway projects.
Maryland and other states like California and Washington have some of the highest gas taxes in the U.S.
Missouri
Missouri’s gas tax goes up on July 1 from $0.22 to $0.245 per gallon. State legislation means that Missourit’s gas tax increases on a schedule such that the gas tax rises to $0.125 per gallon by 2025. According to AAA, the average price of a gallon of gas in Missouri is $3.27.
Virginia
Fuel taxes (and the gas tax) in Virginia increases on July 1. The current 28 cents per gallon tax rises to 29.8 cents per gallon. AAA puts the average gas price (pre-gas tax increase) in Virginia for a gallon of regular at $3.30 this week.
