Gas Taxes in Indiana, Part 2

2 Mar

Yesterday, I posted about how gas taxes in Indiana were calculated (Gas Taxes in Indiana). As promised, today I wanted to share some data about how Indiana’s fuel taxes (both gasoline) compare to those of other states.

Note that comparing gas taxes between states isn’t as straightforward as you might think. States use a combination of specific taxes (taxes that are based the number of units of the item or service taxed) and ad valorem taxes (taxes that are based on the value or price of the item or service taxed). To the point here, while the Indiana excise tax for gasoline is 18c per gallon (a specific tax), the non-tax part of the retail price of gasoline also is subject to the general gross retail sales tax of 7% (the same sales tax you pay for any other items purchased). So the actual taxes paid by motorists at the pump per gallon depend on the price of gasoline at the time. In analyzing the tax on fuel between states, therefore, one must use some sort of average fuel price across the state as a basis for comparison.

So how does Indiana stack up?

First, consider only the excises tax on gasoline. The following table shows the excise tax by state (based on 2012 information from the American Petroleum Institute).

State Excise Tax
Fla. 4.0
Ga. 7.5
Alaska 8.0
N.Y. 8.1
N.J. 10.5
Pa. 12.0
Wyo. 13.0
S.C. 16.0
Okla. 16.0
Ala. 16.0
Mo. 17.0
N.M. 17.0
Hawaii 17.0
Va. 17.5
Miss. 18.0
Ariz. 18.0
N.H. 18.0
Ind. 18.0
Vt. 19.0
Ill. 19.0
Mich. 19.0
La. 20.0
Tex. 20.0
Tenn. 20.0
W.Va. 20.5
Iowa 21.0
Mass. 21.0
Ark. 21.5
Colo. 22.0
S.D. 22.0
Del. 23.0
N.D. 23.0
Nev. 23.0
Md. 23.5
D.C. 23.5
Kans. 24.0
Utah 24.5
Idaho 25.0
Conn. 25.0
Ky. 26.4
Nebr. 26.7
Mont. 27.0
Ohio 28.0
Minn. 28.0
Ore. 30.0
Maine 30.0
Wis. 30.9
R.I. 32.0
Calif. 35.7
Wash. 37.5
N.C. 38.9

Indiana shares the 10th lowest rank for gasoline taxes by state.

However, when you throw in the sales tax and other taxes, the ranking changes quite a bit:

State Excise Tax Other State Taxes and Fees Total
Alaska 8.0 0.0 8.0
Wyo. 13.0 1.0 14.0
N.J. 10.5 4.0 14.5
S.C. 16.0 0.8 16.8
Okla. 16.0 1.0 17.0
Mo. 17.0 0.3 17.3
Miss. 18.0 0.8 18.8
N.M. 17.0 1.9 18.9
Ariz. 18.0 1.0 19.0
N.H. 18.0 1.6 19.6
Va. 17.5 2.3 19.8
La. 20.0 0.0 20.0
Tex. 20.0 0.0 20.0
Ala. 16.0 4.9 20.9
Tenn. 20.0 1.4 21.4
Ark. 21.5 0.3 21.8
Iowa 21.0 1.0 22.0
Colo. 22.0 0.0 22.0
Del. 23.0 0.0 23.0
N.D. 23.0 0.0 23.0
Mass. 21.0 2.5 23.5
Md. 23.5 0.0 23.5
D.C. 23.5 0.0 23.5
S.D. 22.0 2.0 24.0
Utah 24.5 0.0 24.5
Kans. 24.0 1.0 25.0
Idaho 25.0 0.0 25.0
Vt. 19.0 7.1 26.1
Nebr. 26.7 0.9 27.6
Ky. 26.4 1.4 27.8
Mont. 27.0 0.8 27.8
Ohio 28.0 0.0 28.0
Minn. 28.0 0.1 28.1
Ga. 7.5 21.9 29.4
Ore. 30.0 1.0 31.0
Maine 30.0 1.5 31.5
Pa. 12.0 20.3 32.3
Wis. 30.9 2.0 32.9
R.I. 32.0 1.0 33.0
Nev. 23.0 10.1 33.1
W.Va. 20.5 12.9 33.4
Fla. 4.0 31.0 35.0
Wash. 37.5 0.0 37.5
Ind. 18.0 20.9 38.9
Ill. 19.0 19.9 38.9
N.C. 38.9 0.3 39.2
Mich. 19.0 20.4 39.4
Hawaii 17.0 30.1 47.1
Conn. 25.0 23.6 48.6
Calif. 35.7 12.9 48.6
N.Y. 8.1 40.9 49.0

Now, Indiana ranks at the 7th highest overall gas tax. So when you compare state by state, it is critical to take into account all of the applicable taxes, not just the so-called Gasoline Tax.

The American Petroleum Institute (API), an oil and gas industry trade group and certainly not an unbiased source, nonetheless puts out some useful graphics that illustrate the magnitude of gasoline taxes by state.

The following chart  illustrates the overall tax on gasoline by state (click to enlarge).

gasolinetaxes

The API numbers illustrated on the chart include all combined federal, state, and local taxes on gasoline. Note that these numbers won’t necessarily absolutely match any other set of statistics on fuel taxes, since the numbers for the states with ad valorem taxes (like Indiana’s sale tax) will depend on the prices used in the analysis, which vary by day.

Now, for diesel: the following chart illustrates the overall tax on diesel by state (click to enlarge).

dieseltaxes

This chart shows that Indiana actually has the second-highest tax for diesel fuel (used by motor carriers), after Connecticut. Remember that in addition to the 16c per gallon excise tax on diesel fuel, Indiana also assesses a motor carrier surcharge tax of 11c per gallon, which is paid quarterly by the carrier.

Of course, depending the pricing at the time, New York and California may challenge Indiana for motor carrier fuel tax supremacy!

In addition, a number of states (including California, Iowa, Michigan, Washington, Ohio, and Florida), struggling with declining infrastructure and reduced overall revenues from gas taxes (from more fuel-efficient vehicles and behavioral changes from drivers) have seen recent conversations in their respective statehouses considering raises on fuel tax, as well as more radical fee structures for road funding including Vehicle Miles Traveled (VMT) taxes. So this map may look quite a bit different in the foreseeable future!

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One Response to “Gas Taxes in Indiana, Part 2”

Trackbacks/Pingbacks

  1. Raise the Federal Gas Tax? | in53 - MoCoGov - May 15, 2014

    […] For a little more context on the various taxes on fuel, see my previous blog posts Gas Taxes in Indiana and Gas Taxes in Indiana Part 2. […]

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