Gas taxes vary wildly by state. The difference between the cheapest and most expensive state gas tax is about 50 cents per gallon. That's real money if you're filling up every week.
Here's which states have the lowest gas taxes and how much it actually matters at the pump.
The cheapest gas tax states
These states consistently have the lowest combined state gas tax rates:
Alaska has the lowest gas tax of any state at around 9 cents per gallon. But don't let that fool you. Alaska gas is still expensive because of massive transportation costs to get fuel to remote areas.
Mississippi charges about 18 cents per gallon in state gas tax. Combined with proximity to Gulf Coast refineries, this makes Mississippi one of the cheapest states for gas overall. Low tax plus short supply chain is the winning formula.
Oklahoma has a state gas tax around 19 cents. Add in local oil production and refinery capacity, and Oklahoma is consistently one of the cheapest states at the pump.
Missouri has historically had one of the lowest gas taxes in the country, though it has risen in recent years. It's still well below the national average.
Tennessee keeps its gas tax low at around 26 cents per gallon. That's a big reason Tennessee gas is consistently below the national average despite not having much refinery capacity.
The most expensive gas tax states
For comparison, here's what the other end looks like:
Pennsylvania charges about 58 cents per gallon, the highest or near-highest in the country depending on the year. That single tax rate explains most of why Pennsylvania gas is so expensive relative to neighboring Ohio and West Virginia.
California is around 70 cents per gallon when you add up all the state and local fuel taxes and fees. That's before the special fuel blend costs and environmental compliance.
Illinois, especially Chicago, stacks state, county, and city fuel taxes that push the combined rate well above 50 cents per gallon in the metro area.
How much does gas tax actually affect pump price?
A lot. Gas tax is a fixed per-gallon charge, not a percentage. So it hits the same whether crude oil is at $50 or $100 per barrel.
If you drive 12,000 miles a year at 25 MPG, you buy about 480 gallons. The difference between Mississippi's 18-cent tax and Pennsylvania's 58-cent tax is 40 cents per gallon. That's $192 per year. For a two-car household, almost $400.
For a fleet operator running trucks through multiple states, the math gets much bigger. A truck burning 20,000 gallons a year saves $8,000 by fueling in a low-tax state versus a high-tax state. That's why smart fleet managers plan fuel stops carefully.
Tax isn't the whole story
Low taxes help, but they're not everything. Alaska has the lowest gas tax in the country and some of the highest pump prices because transportation costs are enormous. New Jersey has moderate taxes but cheap gas because it sits next to major refineries.
The cheapest gas comes from the combination of low taxes AND good refinery access. That's why the Gulf Coast states (Texas, Louisiana, Mississippi, Oklahoma, Alabama) dominate the bottom of the price rankings.
Check current prices for all 50 states on the FuelWatch map, or set a price alert to get notified when prices in your state cross a threshold.