Additional Coverage:
- 10 States With the Lowest Gas Taxes (See How Yours Stacks Up) (financebuzz.com)
Fueling Up Smarter: A Look at States with the Lowest Gas Taxes
For many American drivers, the cost of filling up the tank can significantly impact the monthly budget. While gas prices fluctuate due to various factors, state gas taxes play a consistent role in what you pay at the pump. A recent analysis by the Tax Foundation highlights the states where drivers enjoy the lowest gas taxes, potentially offering a financial perk for those considering a move.
Here’s a breakdown of the top 10 states with the lowest gas taxes, rounded to the nearest cent:
10. North Dakota
- Tax rate per gallon: 23 cents
Drivers in North Dakota benefit from relatively low gas taxes, contributing to generally moderate gas prices in the state.
However, it’s always wise to factor in other vehicle-related expenses, such as car insurance and registration, when planning your budget.
9. Delaware
- Tax rate per gallon: 23 cents
Delaware offers a low gas tax, and while average gas prices hover around a stable $2.72, this is still a noticeable advantage compared to neighboring states like Pennsylvania and Maryland, which typically see significantly higher prices.
8. Mississippi
- Tax rate per gallon: 21 cents
With a gas tax of approximately 21 cents, Mississippi’s drivers enjoy some of the nation’s lowest gas prices, currently averaging $2.49.
This affordability is further bolstered by the state’s close proximity to major Gulf Coast refineries.
7. Louisiana
- Tax rate per gallon: 20 cents
Louisiana, home to numerous oil refineries and boasting low gas taxes, provides relatively inexpensive gas for its residents.
However, Bayou State drivers should be mindful of other vehicle costs, as Louisiana has the highest car insurance costs in the nation.
6. Texas
- Tax rate per gallon: 20 cents
Another state benefiting from a high concentration of oil refineries, Texas enjoys lower gas delivery costs and, consequently, more affordable gas prices for its drivers.
5. Oklahoma
- Tax rate per gallon: 20 cents
Oklahoma’s strategic location near oil refineries, combined with its low gas taxes, translates into some of the cheapest gas prices in the country, averaging around $2.29 per gallon, leaving more cash in drivers’ pockets.
4. Arizona
- Tax rate per gallon: 19 cents
Arizona shares a similar gas tax rate with New Mexico, but drivers here typically face higher gas prices, averaging $3.08 compared to New Mexico’s $2.68.
This difference may be partly attributed to Arizona’s greater distance from Gulf Coast refineries.
3. New Mexico
- Tax rate per gallon: 19 cents
New Mexicans enjoy comparatively affordable gas prices, making it a convenient and cost-effective stop for drivers passing through from Utah, Arizona, and Colorado.
While gas taxes are low, residents should remember other state taxes, including an income tax ranging from 1.7% to 5.9% and an average combined state and local sales tax rate of 7.67%.
2. Hawaii
- Tax rate per gallon: 19 cents
Despite a relatively low gas tax rate of 19 cents, Hawaii consistently sees some of the nation’s highest gas prices, averaging $4.42.
This, coupled with a high overall cost of living, is often the price of paradise for those who choose to reside in the Aloha State.
1. Alaska
- Tax rate per gallon: 9 cents
Alaska holds the distinction of having the lowest gas taxes in the entire country.
However, drivers in the Last Frontier still experience higher-than-average gas prices, clocking in at $3.58 per gallon, compared to the national average of $2.85. The state’s remoteness and smaller gasoline market are key factors contributing to these elevated costs.
The Bottom Line
The cost of fueling up your vehicle varies significantly across the nation due to state gas taxes. For those who spend a considerable amount of time behind the wheel, choosing a state with lower gas taxes could offer a notable financial advantage, especially when considering a move.
Beyond gas taxes, there are always opportunities to enhance your financial well-being:
- Boost Your Income: Explore side hustles or other legitimate ways to supplement your earnings.
- Grow Your Savings: Take advantage of time and compound interest.
Understanding your current financial standing is the first step toward building a solid plan, and consulting a financial professional can help ensure your long-term wealth.
- Seize Opportunities: Maximizing senior benefits, securing the best car insurance rates, and avoiding common money-wasting traps can all contribute to a healthier financial picture.
Read More About This Story:
- 10 States With the Lowest Gas Taxes (See How Yours Stacks Up) (financebuzz.com)