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One for the road

September 1, 2006

Highway_2_1
I know you’re sitting there at your desk, counting down the hours until the benevolent boss (we all have one of those, right?) decides you can skate out a bit early. As soon as that happens, it’s on the road for one final summer trip over the long Labor Day weekend.

Not to start your journey out on a bummer, but this is a tax blog. So I’m compelled to share a report from AccountingWEB on state gasoline taxes.

Gas prices have stabilized (yeah, that’s what we’ll call it, stable …) around $3 a gallon nationwide, but a chunk of that amount goes not to ExxonMobil or BP or Shell, but to government treasuries. About 17 percent, or 50 cents, according to the article.

That half dollar levy includes a flat federal excise tax of 18.4 cents per
gallon. Then, depending on the state, there are a variety of additional levies.

The country’s highest gas taxes? According to AccountingWEB it’s paid by drivers in Wisconsin, who shell out 32.1 cents per
gallon. The Badger State’s tax varies, based on inflation.

Next is New York at 31.9 cents per gallon, a levy that includes an 8-cent-per-gallon excise tax, 15.2 cents per gallon for the petroleum
business tax, state sales tax, a spill fee
and a petroleum fee. In addition, Empire State counties also can tack on sales taxes, which range from 3.25 percent to 4.75 percent.

Sunshine State drivers get the best gas tax break. Florida collects just 14.5 cents per gallon. That includes a
10.5 cent sales tax and a 4 cent excise tax. But, notes the article, the state adds fees
for environmental inspection purposes, water quality assurance, the
Inland Protection Fund, the Coastal Protection Trust Fund and weights
and measures inspections.

And local Florida governments can charge from 9.9 to 17.8 cents per
gallon in gas taxes on top of all that.

For a full list of state fuel taxes, check out this page compiled by the Federation of Tax Administrators.

Highway_painting_ljlindhurst_2
Repaving the way with tax dollars:
States typically apply gas tax collections toward road maintenance and upkeep of other transportation systems. But some states say that’s not enough and collect road tolls, too.

Here in Texas, where our gas tax is 21 cents a gallon (a rate that’s been frozen since 1991), a debate is raging in the Austin area over a plan to turn existing roads built by tax revenue into toll roads.

Gov. Rick Perry and other toll supporters argue that even a 20 cent increase in the gas
tax would not raise enough long-term money to keep up Lone Star roads. Such a tax hike would cost the average Texas driver $100 a year, according to numbers crunched by the Austin American-Statesman, while taking the toll road would come to around $1,000 a year for the average driver.

Hmmm. Maybe when I head out next week on my driving trip down memory lane, I’ll forgo the extra rest stop beverage purchase as a way to make up for the gas taxes I’ll be burning in my recently tuned-up Cavalier. An added bonus: That should get my cousin and me to our ultimate destination that much sooner.

For those of you heading out today, be safe and have fun! One more family trip is worth a few pennies on the tax dollar, isn’t it?

The painting "Highway" by LJ Lindhurst © 2005

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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