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Federal Gas Tax Rates

History of the Federal Gas Tax

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Gas prices going up 10 cents a week

Gas prices going up 10 cents a week

Kevork Djansezian/Getty Images
Updated June 28, 2011

The gas tax was first imposed by the federal government in 1932 at a mere 1 cent per gallon. It has increased 10 times since President Herbert Hoover authorized the creation of such a tax to balance the budget. Drivers now pay 18.4 cents a gallon in the federal gas tax.

Also see:Should Congress Raise the Gas Tax?

Here are the gas tax rates per gallon through the years, according to U.S. Department of Transportation and Congressional Research Service reports:

  • 1 cent - June 1932 through May 1933

Hoover authorized the first ever gas tax as a way to close an anticipated $2.1 billion federal deficit in the fiscal year 1932, a time of severe depression when the government saw revenue in steep decline.

According to the Congressional Research Service report The Federal Excise Tax on Gasoline and the Highway Trust Fund: A Short History by Louis Alan Talley, the government raised $124.9 million from the gas tax in fiscal year 1933, which represented 7.7 percent of the total Internal Revenue collection of $1.620 billion from all sources.

  • 1.5 cents - June 1933 through December 1933

The National Industrial Recovery Act of 1933, signed by Hoover, extended the original gas tax and increased it to 1.5 cents.

  • 1 cent - January 1934 through June 1940

The Revenue Act of 1934 rescinded the half-cent gas tax increase.

  • 1.5 cents - July 1940 through October 1951

Congress raised the gas tax by half a cent in 1940, just before the United States entered World War II, to help boost national defense. It also made the gas tax permanent in 1941.

  • 2 cents - November 1951 through June 1956

The Revenue Act of 1951 increased the gas tax to generate additional revenue after the Korean War began.

  • 3 cents - July 1956 through September 1959

The Highway Revenue Act of 1956 established the federal Highway Trust Fund to pay for the construction of an Interstate System, Talley wrote, as well as financing primary, secondary and urban routes. The gas tax was hiked to help generate revenue for the projects.

  • 4 cents - October 1959 through March 1983

The Federal-Aid Highway Act of 1959 boosted the gas tax by 1 cent.

  • 9 cents - April 1983 through December 1986

In the largest single gas tax increase, President Ronald Reagan authorized a 5 cent hike in the rate spelled out in the Surface Transportation Assistance Act of 1982, which helped to fund both highway construction and mass transit systems across the country.

Also see: Understanding the Ethanol Subsidy

  • 9.1 cents - January 1987 through August 1990

The Superfund Amendments and Reauthorization Act of 1986 tacked on a tenth of a cent to help pay for repairing leaking underground storage tanks.

  • 9 cents - September 1990 through November 1990

The Leaking Underground Storage Tank Trust Fund had reached its revenue goal for the year and the gas tax was reduced by a tenth of a cent.

  • 14.1 cents - December 1990 through September 1993

President George H. W. Bush's signature on the Omnibus Budget Reconciliation Act of 1990, which was designed to help close the federal budget deficit, increased the gas tax by 5 cents. Half of the new gas tax revenue went to the Highway Trust Fund and the other went to deficit reduction, according to the Transportation Department.

  • 18.4 cents - October 1993 through December 1995

The Omnibus Budget Reconciliation Act of 1993, signed by President Bill Clinton, increased the gas tax by 4.3 cents to again reduce the federal deficit. None of the additional revenue was put into to the Highway Trust Fund, according to the Transportation Department.

  • 18.3 cents - January 1996 through September 1997

The Taxpayer Relief Act of 1997, also signed by Clinton, redirected revenue from the 1993 gas tax increase of 4.3 cents to the Highway Trust Fund. The gas tax dropped a tenth of a cent because the Leaking Underground Storage Tank Trust Fund expired.

  • 18.4 cents - October 1997 through today

A tenth of a cent was tacked back onto the gas tax because the Leaking Underground Storage Tank Trust Fund was reinstated.

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