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Question of the Month June 2001 What are the motor fuel tax rates in the 11 Midwestern states? Curiosity about this question has certainly risen along with the recent rise in gas prices. The federal and state taxes (sometimes local as well) that motorists pay add up to a significant amount of the total spent at the pump. All states have had motor fuel taxes for more than 70 years as a way of paying for various road projects. For several decades, though, the tax rates changed infrequently and increases were usually made in 1-cent increments. In response to the energy conservation movement of the 1970s and a growing need to repair highways, states’ motor fuel tax rates nearly doubled in the 1980s. They continued to rise, though at a lesser pace, in the 1990s.   According to the American Petroleum Institute, the following were Midwestern states’ motor fuel taxes (cents per gallon) for gasoline and diesel fuel as of April 1: Illinois, 19 cents for gasoline and 21.5 cents for diesel; Indiana, 15 cents for gasoline and 16 cents for diesel; Iowa, 20 cents for gasoline and 22.5 cents for diesel; Kansas, 20 cents for gasoline and 22 cents for diesel; Michigan, 19 cents for gasoline and 15 cents for diesel; Minnesota, 20 cents for gasoline and diesel; Nebraska, 23.9 cents for gasoline and diesel; North Dakota, 21 cents for gasoline and diesel; Ohio, 22 cents for gasoline and diesel; South Dakota, 22 cents for gasoline and diesel; and Wisconsin, 30.3 cents for gasoline and diesel. On top of these rates, most states have either underground storage tank or environmental fees, and some charge higher taxes to commercial vehicles.  Along with state taxes, motorists pay a federal motor fuel tax of 18.4 cents per gallon for gasoline and 24.4 cents for diesel. Midwestern states that apply a sales tax to gasoline have moved to provide motorists with relief. Last summer, both Illinois and Indiana suspended their sales taxes on gasoline, and legislation introduced in Michigan this year would cap the state’s 6 percent tax once fuel prices top $2 per gallon. For more information on this or any other public policy issue, please call 630-925-1922 or complete the online form for research services. Return to Question of the Month For more information, contact: CSG Midwest

The Council of State Governments  Midwestern Office
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