You might not think much about gas tax since it's included in the price you see at the pump, but the tax on gas can significantly impact what you pay. Sometimes, gas taxes can increase your purchase price by $0.50 or more per gallon, but these states have the lowest gas taxes in the U.S.
If you're taking a road trip to visit family or friends this holiday season, stopping to fill up in one of these states can save you money. You can visit more attractions and have more fun on your trip with all the money you save on gas.
Disclaimer
This ranking only accounts for excise tax rates. Sales taxes are not included. Additionally, states might increase or decrease tax rates during 2024, and some states might also offer gas tax holidays this year.
Methodology:
The data used to calculate the lowest gasoline tax rates by state is provided by the U.S. Energy Information Administration which updates data twice a year on January and July. The average tax rates on gasoline and diesel fuel remained nearly flat since January. Though the national state and tax fees on fuel averaged 33 cents per gallon for gasoline and 34 cents per gallon (cpg) for diesel fuel, all of the states featured on this list carry much lower prices.
It’s worth noting that although Kentucky didn’t make our list, the state registered the largest decrease in gas taxes this year, declining from 27.8 cpg to just 23 cpg between January and July.
With that being said, let’s dive into the states with the lowest taxes on gasoline.
North Dakota
Gas tax total: 23 cents per gallon
North Dakota has one of the cheapest gas taxes in the country, but it’s the only state on this list to charge more than 22 cents per gallon. So, the Peace Garden State takes the tenth place for the lowest gas taxes.
Some good news for diesel vehicles, all special fuels are also priced at 23 cents per gallon. Emergency medical service vehicles may be eligible for a refund on the special fuel tax.
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Delaware
Gas tax total: 23 cents per gallon
In Delaware, the excise tax rate on gasoline is 23 cents per gallon. However, folks that have special fuel vehicles and use diesel, can expect to pay 22 cents per gallon.
You may want to hang around the Small Wonder State and do some shopping while you visit, since Delaware is one of the five states with no sales tax.
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Louisiana
Gas tax total: 20.9 cents per gallon
Louisiana's excise tax on gasoline is just 20.9 cents per gallon. You can fill up your diesel-powered vehicle at the same tax rate of 20.9 cpg, too.
Things go downhill for convenience store purchases, though. Even though Louisiana has a low statewide sales tax rate of 4.45%, localities can charge an additional 7%, according to the Tax Foundation. That’s a lot of sales tax! And, if you want a lot of snacks, you could easily spend what you saved on gas.
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Texas
Gas tax total: 20 cents per gallon
Texas treats its residents well when it comes to income taxes. Of course, if you’re just passing through, being a state with no income tax doesn’t help you much. However, you can pay low taxes when you fill up your vehicle. At just $0.20 per gallon of gasoline and per gallon of diesel fuel, driving across the Lone Star State can feel less costly.
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Oklahoma
Gas tax total: 20 cents per gallon
With a gasoline tax of $0.20 and a diesel fuel tax to match, stopping for gas in Oklahoma just makes sense.
Gas tax jumps $0.05 per gallon in Kansas, which has a gas tax of 25 cents per gallon. It might not seem like much, but those savings can add up. So, it's a good idea to fill up in Oklahoma if you're heading north.
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Arizona
Gas tax total: 19 cents per gallon
Arizona has a cheaper excise tax on gas than Oklahoma does, at only $0.19 per gallon. Diesel fuel is taxed at the same rate for some drivers. However, the rate jumps to $0.26 for heavy vehicles.
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New Mexico
Gas tax total: 18.8 cents per gallon
Visiting New Mexico can offer a nice gas tax break. Though Mexico charges other fees and taxes, the total gas tax still comes in at under $0.20.
Diesel truck owners aren’t quite as lucky. The excise tax on diesel fuel is $0.21, and with the same $0.019 in additional fees, diesel tax totals 22.9 cents per gallon. Still, that is less expensive than most states in the country.
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Hawaii
Gas tax total: 18.5 cents per gallon
Hawaii’s gas tax is nearly double Alaska’s, but it is still very reasonable at a mere 18.5 cents per gallon. The bad news is that this number does not include local tax options, so you could pay a higher rate. Additionally, it’s unlikely you will drive to Hawaii since the state is surrounded by the Pacific Ocean.
Hawaii also has one of the lowest sales tax rates in the U.S., but try to avoid grocery shopping in the state since groceries are taxable.
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Mississippi
Gas tax total: 18.4 cents per gallon
If you can, stop for a fill up in Mississippi. Gas taxes are still below $0.20, and you can enjoy the same $0.18.4 tax rate on diesel fuel, too. Gas taxes become more expensive in the bordering states of Tennessee and Alabama.
But Mississippi tax isn’t all good. You might want to avoid making too many purchases when you stop for gas. The state has a high sales tax rate, and Mississippi even taxes groceries at the full 7%.
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Alaska
Gas tax total: 8.95 cents per gallon
Alaska takes the win for states with the cheapest gas tax. At less than 8 cents per gallon, you can drive further with that $20 bill, and that’s a good thing since Alaska is the largest state in the U.S. Of course, no U.S. states border Alaska, so a road trip might be out of the question unless you fly there first.
If you do find yourself in Alaska, you can also enjoy no state sales tax. However, localities can charge their own sales tax, so don’t be surprised if your convenience store purchase costs a little more than expected.
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