May 20, 2019

These States Abandoned Old Gas Tax Structures in Favor of More Sustainable Variable-Rate Gas Taxes

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Twenty-eight states and the federal government levy fixed-rate gas taxes, which means the tax rate does not change.

Since 2013, eight states (Alabama, Arkansas, Maryland, New Jersey, Pennsylvania, Rhode Island, Utah, and Virginia) as well as the District of Columbia (DC) have abandoned their old gas tax structures in favor of more sustainable, variable-rate taxes in which the tax rate rises alongside gas prices, the general inflation rate in the economy, vehicle fuel efficiency, or other relevant factors. Over this same period, states such as California, Georgia, Illinois, Indiana, Michigan, and North Carolina have made significant improvements to their existing variable-rate tax structures.

Because of these reforms, more than 193 million people (or 59 percent of the U.S. population) now live in places where the state gas tax rate automatically varies over time.

Read More: Most Americans Live in States with Variable-Rate Gas Taxes



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