California’s gas tax jumps to 63.4 cents per gallon on July 1 — the highest in the U.S.

California’s gasoline excise tax will rise to 63.4 cents per gallon on July 1, marking the highest state-level gas tax in the nation. The increase—2.2 cents per gallon—comes as part of an automatic annual adjustment under Senate Bill 1, a 2017 transportation funding law. Less than a decade ago, the state’s gas tax stood at 27.8 cents per gallon; it has since more than doubled. State taxes and fees now add roughly $1.20 to every gallon sold in California, with additional costs including state and local sales taxes, cap-and-trade fees, Low Carbon Fuel Standard compliance costs, and underground storage tank fees. Electric vehicle owners contribute through an annual DMV registration fee instead of paying fuel taxes at the pump. The tax hike arrives as gasoline consumption declines—falling from roughly 13.5 billion gallons to 11.5 billion gallons annually in recent years due to increased EV adoption—posing a funding challenge for road maintenance despite rising tax revenue. California’s pump prices are also influenced by limited pipeline access and recent refinery closures, which increase reliance on trucked and shipped fuel. The state projects roughly $20.3 billion in transportation-related taxes and fees for the 2025–26 fiscal year.