ABC (Michigan Affiliate WZZM): Gas Tax 101
media mentionCarl Davis, a senior analyst at the Institute on Taxation and Economic Policy in Washington, D.C., said Michigan is one of only four states, with Indiana, Illinois and Hawaii, that fully apply their general sales tax to fuel sales.
Of the 41.4 cents in state taxes Michigan motorists pay on a gallon of fuel, only 19 cents is a fuel tax dedicated to transportation. The other 22.4 cents is all sales tax, and under Michigan’s constitution, most of it goes to schools and local governments and very little of it can be spent on roads.