Gas Tax Holidays at the State Level

Which states have them—which may soon get them

While legislation to temporarily suspend the federal gas tax languishes in the Senate, state legislators around the country are stepping up with suspensions of their own. For consumers, this is a good thing since, on average, state taxes are 31.02 cents per gallon, more than one-and-a-half times the federal rate of 18.4 cents.

According to NBC News Data Point, if the 20 states that have discussed suspending all or part of state gas taxes did so, along with the three who already have, drivers would save an average of $4 per fill-up.

23

Number of states that have enacted or proposed gas tax holiday legislation so far.

With the national average price of a gallon of gas sitting at $4.25, any relief is welcomed by consumers. Here's a breakdown of which states have enacted gas tax holiday legislation and which states might.

Key Takeaways

  • As a federal gas tax holiday seems more and more unlikely, states are stepping up with their own legislation.
  • Maryland, Georgia, and Connecticut have passed legislation declaring suspension of gas taxes on a temporary basis.
  • An additional 20 states have either proposed legislation or are in discussions to enact gas tax relief.
  • While federal and state-level gas tax holidays are popular with politicians, transportation experts are skeptical.
  • Some experts worry that consumers wouldn't see the full benefit of a tax break due to weak enforcement.
  • If prices remain high, watch for more states to join the list of those considering a gas tax holiday.

States That Have Enacted Gas Tax Holiday Legislation

So far legislators in Maryland, Georgia, and, most recently, Connecticut, have passed legislation suspending their states' gas tax. Maryland's 36.1 cents per gallon tax on gasoline and 36.85 cents per gallon tax on diesel were suspended for a month beginning March 18, 2022, and ending April 16, 2022. When asked if the gas tax holidays would be extended, Maryland's Office of the Comptroller simply says to consumers, "Currently, the gas tax holiday will end on April 16. We suggest reaching out to your state legislators regarding any possible extensions."

On March 18, Georgia Gov. Brian Kemp signed HB 304, suspending that state's gas and diesel taxes through May 31, 2022. Until then, the state will not charge distributors its 29 cents per gallon gas tax and 32.6 cents per gallon tax on diesel.

Connecticut legislators voted to suspend the state's 25 cents per gallon gas tax on March 24 but did not suspend the 10.75 cents per gallon petroleum products gross earnings tax. The gas tax holiday runs from April 1 through June 30.

States Pressing for a Gas Tax Holiday

In addition to the legislation passed in Maryland, Georgia, and Connecticut, legislators or governors in 20 states have pressed for or introduced legislation to pass a suspension of gas taxes.

Alabama: Legislation introduced in the state legislature would halt the state taxes on gasoline from May 1 to September 1, 2022, but only if the average price of gasoline in Alabama stays above the average price for January 2022.

Alaska: Gov. Mike Dunleavy (R) has asked state legislators to suspend the state's gas tax until June 30, 2023.

California: Legislation has been introduced to suspend the gas tax for six months. That legislation has been stalled. As an alternative, Gov. Gavin Newsom has proposed delaying an upcoming gas tax increase, sending taxpayers up to two $400 rebate checks per vehicle, and providing free public transportation for three months.

Delaware: A bill introduced in the state legislation would suspend fuel taxed for 30 days.

Florida: Recently passed legislation includes a one-month fuel tax holiday in October. The delay was designed to ensure residents would benefit rather than tourists since October is considered the end of the summer vacation season.

Idaho: A proposed bill before the state legislature would reduce the state's gas tax for two years.

Illinois: Gov. J.B. Pritzker (D) proposed delaying the annual gas tax increase, while some state legislators would rather cap the state's gas tax at 18¢ per gallon.

Maine: A bill has been introduced in the legislature to suspend the state's gas tax until the end of the year.

Michigan: The state legislature passed legislation imposing a six-month suspension of the gas tax beginning next year.

Minnesota: Legislators have proposed a gas tax holiday from Memorial Day to Labor Day.

Mississippi: A six-month gas tax holiday has been proposed and added to a larger tax bill that's currently working its way through the legislature.

Missouri: A six-month fuel tax holiday has been proposed and introduced as a bill in the state legislature.

New Hampshire: Gov. Chris Sununu (R) supports a temporary suspension of his state's gas tax.

New Jersey: The state legislature is considering a bill that would provide an immediate $250 or $500 gas tax rebate to consumers.

New York: Multiple bills are being considered by the state legislature. Some would suspend the tax for different time periods and another would cap the state gas tax at 25¢ per gallon.

Ohio: A bill before the state legislature would reduce the gas tax for five years.

Pennsylvania: Legislators have introduced multiple bills to temporarily cut the gas tax or suspend it through the end of the year.

Rhode Island: A bill before the state legislature would suspend the state's gas tax for the rest of the year.

Virginia: Gov. Glenn Youngkin (R) is pushing for a three-month gas tax holiday—May to July—and then phase the state's gas tax back in slowly in August and September.

West Virginia: A group of Democratic state legislators have asked the governor to declare a special legislative session to pass a gas tax holiday, something the governor says would be illegal.

18.4 cents

The amount per gallon in savings consumers would see with a Federal gas tax holiday.

Status of a Federal Gas Tax Holiday

Senate Bill 3609, the Gas Prices Relief Act of 2022, is the Congressional version of state action on the suspension of fuel taxes, in this case, the suspension of the federal government's 18.4 cents per gallon tax on gasoline and 24.4 cents per gallon tax on diesel.

The legislation, sponsored by Senator Mark Kelly (D-AZ) and co-sponsored by six other Democratic Senators was introduced on February 9, 2022, read twice, and referred to the Committee on Finance where it remains pending further action. The Senate version eliminates the federal gas tax until Jan. 1, 2023.

Similar legislation from the House (H.R. 6787), also titled the Gas Prices Relief Act of 2022, was introduced by Rep. Tom O'Halleran (D-AZ-1) on February 18, 2022, and referred to the House Ways and Means Committee, where it is also awaiting further action. As with the Senate version, the House version also suspends the federal portion of the gas tax until Jan. 1, 2023. 

Chances of federal gas tax holiday legislation becoming law are unlikely since the savings from now to the end of the year would not be large while the losses in tax revenue would be high—estimated at $20 billion by the Committee for a Responsible Federal Budget. This would be nearly half of the revenue expected by the Highway Trust Fund in 2022.

Consumers May Not See All of the Savings

Although congressional legislation contains specific language stating the intention of Congress that consumers immediately receive the benefit of this exemption, there's concern that oil companies wouldn't pass along all of the savings to consumers.

The problem, according to the non-partisan Tax Foundation, is that the policy "has no teeth," just a "weak enforcement clause" that charges the U.S. Treasury Department with "using all applicable authorities to ensure that the benefit of the reduction in taxes… is received by consumers." Without specific fines or penalties, says the Foundation, there is no incentive for producers to follow the law.

The Debate Continues

In the midst of a debate between politicians who generally see the popularity of gas tax holidays as a plus and transportation experts who say the idea offers modest savings at a high cost in highway repair funds, more and more states are, nonetheless, considering suspending their fuel taxes, at least temporarily. Currently, only three states have passed legislation but 20 more are thinking about it. Watch for others to join the list if gas prices remain high going into the busy summer travel season.

Article Sources

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  1. U.S. Senate. "Summary: S.3609 — 117th Congress (2021-2022)All Information (Except Text)."

  2. U.S. Energy Information Administration. "How much tax do we pay on a gallon of gasoline and on a gallon of diesel fuel?"

  3. NBC News Data Point. "Drivers could save an average of $4 every time they fill their gas tanks as a result of the pauses, an NBC News analysis of the state proposals shows."

  4. AAA. "National Average Gas Prices."

  5. Maryland.gov. "Frequently Asked Questions On The Maryland Motor Fuel Tax Holiday."

  6. Maryland Office of the Comptroller. "Maryland’s Gas Tax Holiday Frequently Asked Questions for Consumers."

  7. Georgia.gov. "Gov. Kemp Signs HB 304, Temporarily Halts State Gas Tax Through End of May."

  8. Connecticut.gov. "Governor Lamont Signs Emergency Legislation Suspending Connecticut’s Excise Tax on Gas From April 1 to June 30."

  9. Kiplinger. "Will a Gas Tax Holiday Lower Gas Prices Near You?"

  10. U.S. House of Representatives. "H.R.6787 - Gas Prices Relief Act of 2022."

  11. Committee for a Responsible Federal Budget. "Gas Tax Holiday Would Cost $20 Billion."

  12. Tax Foundation. "Suspending the Gas Tax Is a Mistake."

  13. NPR. "Politicians and experts debate whether gas tax holidays are worthwhile."

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