State Gas Tax Suspensions Expand Across the US Amid Pump Price Strains
State leaders are stepping in to provide relief at the fuel pump as Washington fails to reach a consensus on suspending the federal gas tax. The federal levy currently sits at 18.4 cents per gallon for gas and 24.4 cents for diesel.
Bipartisan Pressure and Legislative Actions in Ohio
The push in Ohio followed mounting political pressure from both sides of the aisle. Democratic gubernatorial candidate Amy Acton initially called for a gas tax holiday, which prompted her rival, Vivek Ramaswamy, to announce a competing plan alongside Republican legislative leaders. DeWine ultimately signed the 90-day suspension into law to combat rising costs.
National Fuel Tax Relief Measures
Georgia became the first state to pause its fuel taxes in March under Republican Gov. Brian Kemp during the war in Iran. Kemp later declared a state of emergency in late September to suspend the excise tax for an additional 30 days. At least five other states have since lowered, suspended, or halted scheduled increases in their fuel taxes.
Utah cut its gas tax by roughly 15% through the end of the year. Kentucky Gov. Andy Beshear froze an expected tax increase on gas and diesel in May, while Illinois paused its statutory increase for six months over the summer. Indiana Gov. Mike Braun suspended the state’s gas tax in April, later renewing the suspension in September and lifting restrictions on dyed diesel for agricultural and timber workers.
States waive regulations to support strained industries
Several states chose to waive seasonal regulations rather than alter tax rates to help strained industries. Alabama Gov. Kay Ivey directed state law enforcement to stop enforcing rules against dyed diesel—traditionally reserved for off-road machinery and exempt from taxes—to support agricultural and timber communities. Louisiana, Nebraska, North Carolina, Oklahoma, and Texas implemented similar exemptions.
Other states targeted fuel formulation rules. California permitted the sale of cheaper winter-blend gasoline earlier than usual, and Michigan authorized gas stations to sell lower-cost fuel earlier in the spring.
Congress stalls federal gas tax holiday legislation
While the Trump administration expressed openness to a federal gas tax holiday earlier this spring, Congress has not advanced the legislation. Critics warn that suspending fuel levies can widen government deficits and deprive the Highway Trust Fund of necessary revenue. Analysts note that state-level tax pauses cannot fully offset the severe price spikes drivers have encountered since the onset of the conflict in Iran, which has driven $100 billion in extra energy costs for U.S. consumers.
Frequently Asked Questions
How much is the federal gas tax?
The federal gas tax is 18.4 cents per gallon for gasoline and 24.4 cents per gallon for diesel. Congress has not suspended these levies despite proposals from lawmakers.
Which state was first to pause its fuel taxes?
Georgia was the first state to suspend its fuel taxes, with Republican Gov. Brian Kemp approving a 60-day pause in March amid the war in Iran. Kemp subsequently declared a state of emergency in late September to suspend the excise tax for another 30 days.
What specific relief did Utah provide?
Utah cut its gas tax by approximately 15% through the end of the year to ease cost-of-living pressures for drivers.
How did Alabama assist its agricultural sector?
Gov. Kay Ivey directed state law enforcement to suspend enforcement rules against dyed diesel, which is normally restricted to off-road machinery and exempt from taxes, to relieve farmers and timber communities.
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