Fuel taxes rise in multiple states as Illinois suspends hike

Several U.S. states implemented automatic fuel-tax increases on July 1, pushing up the cost of gasoline and diesel as part of inflation-linked adjustments. California, Maryland, Virginia, and Washington all raised their motor-fuel tax rates, while Illinois temporarily suspended its scheduled hike through December 31. The moves highlight the growing reliance on formula-based tax adjustments tied to economic benchmarks like the Consumer Price Index (CPI).

In California, the state tax on diesel and biodiesel rose to 48.2 cents per gallon from 46.6 cents, while gasoline climbed 2.2 cents to 63.4 cents per gallon. The increase stems from an annual inflation adjustment under a 2017 law. Critics, including Assemblyman Heath Flora (R), argue that the state already imposes some of the highest gas prices in the U.S., with additional costs from state fees and mandates pushing the total burden to around $1.20 per gallon. Republicans have repeatedly pushed to suspend the motor-fuel tax, citing its role in driving up costs for drivers.

Maryland’s comptroller’s office implemented similar adjustments, raising diesel and biodiesel taxes to 47.45 cents per gallon (up 0.7 cents) and gasoline to 46.6 cents per gallon (up 0.6 cents). The state’s Republicans criticized Democrats for allowing the automatic hikes, which they say add to the financial strain on families at the pump.

Virginia also saw slight increases, with diesel now taxed at 33.6 cents per gallon (up from 32.7 cents) and gasoline at 32.6 cents per gallon (up from 31.7 cents). The changes are part of the state’s annual recalibration process.

Washington introduced its first inflation-adjusted fuel-tax hike under legislation designed to fund road and bridge maintenance. Diesel is now taxed at 59.5 cents per gallon (up from 58.4 cents), and gasoline at 56.5 cents per gallon (up from 55.4 cents). The state’s gas taxes, combined with climate fees, have pushed prices significantly higher than the national average, according to the Washington Policy Center.

Illinois, however, bucked the trend by suspending its planned 2.68% CPI-based motor-fuel tax increase through December 31. The state’s current tax rates remain at 55.8 cents per gallon for diesel and 48.3 cents per gallon for gasoline. Lawmakers approved the suspension as part of a broader finance and tax package, Public Act 104-0468, adopted on June 16. The move provides temporary relief to drivers amid ongoing debates over fuel-tax policies.

The trend underscores the broader reliance on formula-driven tax adjustments in many states, which can lead to unpredictable cost fluctuations for consumers. As inflation pressures persist, these automatic increases are likely to remain a contentious issue in state legislatures across the country.