Gas tax ticks up today in Michigan

Michigan’s gas tax is rising from 27.2 cents per gallon to 28.6 cents per gallon today, Sunday, Jan. 1.

A state law signed during Gov. Rick Snyder’s tenure automatically increases the gas tax each year, starting in 2022. It goes up each year by either 5% or the inflation rate – whichever is lower.

Because inflation hovered around 8% in 2022, the gas tax is only rising 5% in 2023. That comes to 1.4 cents per gallon.

For every 15 gallons of gas purchased, it will add 21 cents to the total bill.

Annual increases were built into Michigan law to help the state keep up with its crumbling infrastructure, since gas tax money goes toward fixing the roads.

Michigan went nearly 20 years without a gas tax increase until Snyder signed a new road funding package to raise the gas tax and increase registration fees.

Here’s a look at how the state gas tax has changed since 1997.

(Can’t see the link? Click here.)

In 2022, Michigan was slightly above the national average for state gas tax – which was 26 cents per gallon. Pennsylvania, California and Washington all have state gas taxes of 49 cents or higher.

The 28.6-cent tax isn’t the only gas tax Michiganders pay, however. There’s also an 18.4-cent federal gas tax, a 1-cent environmental protection regulatory fee and a 6% state sales tax.

(Can’t see the pie chart? Click here.)

Altogether, Michigan’s total gas tax in July 2022 was about 70 cents per gallon.

It changes by the minute, though, based on the price of gas – since the 6% sales tax is costlier when gas is more expensive. Here’s a look at every state’s overall gas tax as of July 2022, the most recent data available from the U.S. Energy Information Administration.

(Can’t see the map? Click here.)

When factoring in all taxes, Michigan had the sixth-highest gas tax in the U.S. in July 2022. Many states don’t charge sales tax on gas – which explains why Michigan’s state gas tax is average, but overall gas tax is among the nation’s highest.

Michigan lawmakers considered suspending the state’s gas tax in 2022 because of rising prices at the pump, but couldn’t come to a deal.

The new gas tax increase may be less noticeable, thanks to declining gas prices. The national average for regular, conventional gas topped out at $4.84 this June, and averaged more than $5 per gallon in Michigan. Both have since fallen to around $3 per gallon.

Here’s a look at the change in average gas prices throughout 2022.

(Can’t see the chart? Click here.)

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