gas tax

[Chris]

I was wondering how the American tax on gasoline is made up.

As far as I know, there is a federal tax, plus states can add additional tax if they need funding. But does the general sales tax also apply to motor fuels? So is it taxed double (gas tax+sales tax) or is it exempted from sales tax because it's already taxed with the gas tax?

[barcncpt44]

some states such as california, georgia, michigan and a few others charge a sales tax including the federal and state fuel tax.  some states charges tax on all types of fuel like jet fuel, natural gas while some do not.  Each state sets it own gas tax on gasoline and diesel (usually higher tax) and even some cities charge a fuel tax as well.  the fuel tax is not enough to fund our infrastructure and the federal fund is getting bailouts to cover the shortfall.

[Truvelo]

What if gas tax was raised to levels in Europe where 75% of the total price is tax? Not only would it cover the cost of maintaining the roads but it would encourage the use of more economical cars. I imagine the US could drastically reduce the importation of oil from volatile middle eastern countries if people changed their big gas guzzlers for something that uses far less gas.

Alternatively I could see a drastic increase in tax causing mass uproar which will force the government out of office at the next election

[Chris]

In my opinion, European taxation is just excessive. I think a somewhere in between (US vs EU) would be the best. European gas tax levels are far higher than transportation budgets (even when you include public transport).

[SSOWorld]

What if gas tax was raised to levels in Europe where 75% of the total price is tax? Not only would it cover the cost of maintaining the roads but it would encourage the use of more economical cars. I imagine the US could drastically reduce the importation of oil from volatile middle eastern countries if people changed their big gas guzzlers for something that uses far less gas.

Unfortunately - that won't sit over very well with good majority of U.S. citizens who strongly favor lower taxes. 

Alternatively I could see a drastic increase in tax causing mass uproar which will force the government out of office at the next election

exactly.

[agentsteel53]

So is it taxed double (gas tax+sales tax) or is it exempted from sales tax because it's already taxed with the gas tax?

as far as I know, gas has the sales tax included in the state "gas tax" figures  that are posted on the pump.  Either the state allows gas to not have a "sales tax" on it, and increases the "gas tax" accordingly, or its "gas tax" is a combination of a specific tax on gasoline plus a sales tax. 

As there is no federal sales tax in the US, the federal gas tax of 18.4c per gallon is just that and has no components to be aware of.

It's a wash to me personally, how the state labels it.  Tax is tax.  Whether you call it "sales tax" or "gas tax", to me it is a per-unit tax that goes from me to the state coffers.  Hell, to me, the difference between state and federal gas tax is a wash too.  I don't care who uses the tax money - as far as I know, I'm just spending an overage and I'm hoping it's returned to me in the form of better roads somewhere down the line, as opposed to being washed into the general revenue fund and blown away in various sinkholes like Iraq that will never give me a return on my money ...

[Scott5114]

Gasoline is one of the few items on sale in the United States which includes the tax in the posted price. If the sign says $2.64/gal, you pay $2.64 per gallon. Whereas if you go and buy a burger with the posted price of $1, you will pay $1.08, since the posted price doesn't include tax.

[myosh_tino]

So is it taxed double (gas tax+sales tax) or is it exempted from sales tax because it's already taxed with the gas tax?

as far as I know, gas has the sales tax included in the state "gas tax" figures  that are posted on the pump.  Either the state allows gas to not have a "sales tax" on it, and increases the "gas tax" accordingly, or its "gas tax" is a combination of a specific tax on gasoline plus a sales tax. 

As there is no federal sales tax in the US, the federal gas tax of 18.4c per gallon is just that and has no components to be aware of.

It's a wash to me personally, how the state labels it.  Tax is tax.  Whether you call it "sales tax" or "gas tax", to me it is a per-unit tax that goes from me to the state coffers.  Hell, to me, the difference between state and federal gas tax is a wash too.  I don't care who uses the tax money - as far as I know, I'm just spending an overage and I'm hoping it's returned to me in the form of better roads somewhere down the line, as opposed to being washed into the general revenue fund and blown away in various sinkholes like Iraq that will never give me a return on my money ...

I recall during the great gas price run-up of 2008 when gas prices exceeded $4 a gallon in California, a number of news sources (newspapers, local TV, radio, etc) had stories of how state coffers were benefiting from increased sales tax revenue due to the high gas prices.  It then follows that gas prices in California include the 18.4 cent per gallon federal gas tax, 18.0 cent per gallon state gas tax PLUS local sales tax.

So, in California, "sales tax" and "gas tax" are very different animals.  The gas tax is as you said, a per-unit tax.  The sales tax amount varies depending on how much the base-cost of the gas is.  For example, where I live, the sales tax rate is 9.25% so if the base-cost of gas is $2.00 a gallon, then the sales tax is $0.19 per gallon with the total in state taxes being $0.37 per gallon.  If the base-cost were to rise to $3.00 a gallon, then the sales tax is $0.28 per gallon with the total in state taxes being $0.46 per gallon.

[J N Winkler]

My understanding is that, in California, the sales tax on motor fuel (which is an ad valorem component of the overall tax) still has to go to transportation, per Proposition whatever-it-was that (re-?) established hypothecation in California.

FHWA's Highway Statistics series has information on state motor fuel tax rates:  cf. this 2007 example:

http://www.fhwa.dot.gov/policyinformation/statistics/2007/mf121t.cfm

Separate tables address revenues gathered by these taxes and their disposition.

FHWA also has a compilation of state laws governing motor fuel tax rates and the distribution of revenues therefrom.

http://www.fhwa.dot.gov/ohim/hwytaxes/2008/index.cfm

The general rule of thumb is that, if you allow non-highway uses of highway revenues and highway uses of non-highway revenues to cancel each other out, about 90% of highway spending at all levels of government is covered by highway user revenues.  The approximately 10% remainder is considered acceptable as a subsidy payment in relation to the purely local services (e.g. access to real property) provided by highways.  The situation in the US is not at all like that in western Europe where overall highway user revenues are a high multiple of actual highway spending.

[agentsteel53]

I personally don't care what they call the tax.  Sales tax vs gas tax vs excise tax vs ... whatever.  Say, wait a minute, that's my tax dollars going to fund the legislature so they can argue over the minutiae.  That's not a good use of my money!

Just call it "tax" and get it over with... from my perspective, it's money that's no longer mine.