What Is the Federal Tax on a Gallon of Gas


What Is the Federal Tax on a Gallon of Gas?

The federal tax on a gallon of gas is a tax levied by the United States government on every gallon of gasoline sold. This tax is designed to fund various federal transportation projects and initiatives. The current federal tax on a gallon of gas is 18.4 cents for gasoline and 24.4 cents for diesel fuel. These taxes have been in place since 1993 and have remained unchanged since then.


1. Why is there a federal tax on gas?
The federal tax on gas is imposed to generate revenue for the federal government and fund transportation projects such as building and maintaining roads, bridges, and highways.

2. How much revenue does the federal gas tax generate?
The federal gas tax generates billions of dollars in revenue each year. In 2019 alone, it generated approximately $37 billion.

3. Does the federal gas tax vary from state to state?
No, the federal gas tax is the same across all states. However, individual states may also impose their own additional taxes on gasoline, which can vary.

4. Can the federal gas tax be increased?
Yes, the federal gas tax can be increased. However, any changes to the tax rate would require approval from Congress.

5. Are there any exemptions from the federal gas tax?
Certain vehicles, such as those used in farming or for non-highway purposes, may be exempt from the federal gas tax. Additionally, vehicles powered by alternative fuels, such as electricity or natural gas, may qualify for alternative fuel tax credits.

See also  What Gas Stations Have Icees

6. How is the federal gas tax collected?
The federal gas tax is collected at the point of sale. Gasoline distributors and retailers are responsible for collecting the tax and remitting it to the federal government.

7. How is the federal gas tax used?
The revenue generated from the federal gas tax is primarily used to fund highway construction and maintenance projects, as well as other transportation-related initiatives such as public transportation systems and bike lanes.

In conclusion, the federal tax on a gallon of gas is an important source of revenue for the United States government, funding transportation projects and initiatives that benefit all Americans. While the tax rate has remained unchanged for decades, it is subject to potential changes in the future as transportation needs evolve.