10 States With the Cheapest Gas Taxes in the Country

Gas taxes are easy to overlook when you're filling up the tank. However, depending on where you live, state gas taxes can add a surprising amount to the price you pay per gallon. Over the course of a year, those extra cents can quietly eat into your budget. Knowing where gas taxes are lowest can help you understand where you may be able to keep more cash in your wallet.

Below are the states with the lowest gasoline taxes in the country based on the most recent data from the Tax Foundation. The figures below refer to state gas taxes only and don't include the federal gasoline tax.

1. Alaska

• Gas Tax: Around 9 cents per gallon

Drivers in Alaska benefit from the lowest gas tax in the nation. That unusually low rate stems partly from the state's oil production. Because Alaska collects revenue from its energy industry in other ways, it historically hasn't relied as heavily on gasoline taxes to fund transportation projects.

While the state still faces infrastructure costs, its tax burden at the pump remains far lower than the national average.

2. New Mexico

• Gas Tax: 18.9 cents per gallon

New Mexico's relatively low rate helps place it among the cheapest states for fuel taxes in the country. The state relies on other revenue sources, including energy production and general taxes, to support transportation spending.

Even so, policymakers occasionally debate whether fuel taxes should be adjusted to better fund long-term infrastructure needs.

3. Arizona

• Gas Tax: 19 cents per gallon

Arizona's gasoline tax is among the lowest rates in the country. Arizona's rate hasn't changed in decades, which is one reason it now appears so low compared with other states that regularly adjust fuel taxes.

While this can benefit drivers in the short term, transportation officials have warned that the static rate may not keep pace with rising road maintenance costs.

4. Oklahoma

• Gas Tax: 20 cents per gallon

Oklahoma increased its gasoline tax several years ago to address infrastructure funding gaps. Before that change, Oklahoma had one of the lowest fuel taxes in the nation.

Even after the adjustment, its tax rate remains below that of many other states, helping keep fuel costs relatively manageable for local drivers.

5. Mississippi

• Gas Tax: 21 cents per gallon

Mississippi has a relatively low fuel tax, though the state did recently raise its gas tax to support road and bridge improvements. Even with those increases, however, the state continues to rank among the lowest in the country.

For drivers commuting long distances or traveling frequently, the lower rate may add up to noticeable savings over time.

6. Kansas

• Gas Tax: 25 cents per gallon

Kansas relies heavily on its highways for agriculture and cross-state travel, so maintaining transportation infrastructure is a major priority. Even with those needs, the state's gas tax still falls on the lower end of the national spectrum.

7. Tennessee

• Gas Tax: 27 cents per gallon

Tennessee implemented phased fuel tax increases beginning in 2017 to support highway construction and maintenance projects. Even with those adjustments, though, Tennessee continues to rank toward the lower end nationally.

Because the state also avoids a personal income tax on wages, many residents see overall transportation costs as relatively manageable.

8. South Carolina

• Gas Tax: 29 cents per gallon

South Carolina gradually raised its fuel tax through a multi-year plan designed to address long-standing road maintenance issues. While drivers saw incremental increases at the pump, the tax remains lower than many other states that charge well over 30 cents per gallon.

9. Missouri

• Gas Tax: 30 cents per gallon

Missouri has gradually raised its fuel tax in recent years through phased increases approved by lawmakers.

Despite this, the tax still remains near the bottom nationally. Because transportation funding remains a major issue in the state, additional increases could still be debated in future legislative sessions.

10. Alabama

• Gas Tax: 31 cents per gallon

Lawmakers in Alabama approved a phased gas tax increase in 2019 to help fund road and bridge improvements across the state. The increase raised revenue for infrastructure while still keeping Alabama's fuel taxes lower than those of many other states.

Why gas taxes vary so widely

Gas taxes differ significantly from state to state because each government funds transportation in slightly different ways. States might rely on:

• Gasoline taxes
• Vehicle registration fees
• Toll roads
• General tax revenue

Some states also index fuel taxes to inflation or fuel prices, meaning the rate can rise automatically over time. Others keep the tax fixed for years, which can make their rates look relatively low compared with states that adjust them regularly.

Bottom line

State gas taxes might only add a few cents per gallon, but those small differences can quickly shape what drivers pay at the pump over time. Knowing which states keep these taxes low may help drivers better understand the factors behind fuel prices and eliminate some money stress.

The federal gasoline tax has remained at 18.4 cents per gallon since 1993, according to the U.S. Energy Information Administration. Because it hasn't changed in decades, much of the variation in fuel taxes across the country now comes from state-level policies.

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