Several states are pushing to suspend or eliminate their gas taxes as drivers face prices that have risen more than $1 per gallon since the Iran war began. There has also been a push to suspend the 18-cent-per-gallon federal gas tax, but critics say neither move would do much to lower prices at the pump.
President Donald Trump has called for a temporary suspension of the federal tax, and some U.S. lawmakers and auto industry lobbyists have agreed. Trump said in a telephone interview with a CBS News reporter in May that he thought lifting the tax temporarily would be a “great idea.”
Georgia Gov. Brian Kemp announced a one-month suspension of his state’s 33-cent gas tax on Sept. 28. Indiana, Ohio, Alabama, Louisiana and Texas have also initiated or considered gas-tax holidays. Indiana Gov. Mike Braun said Sept. 30 that he extended his state’s suspension until early November, with additional relief for farmers.
The national average gas price was $4.41 per gallon on Oct. 1, according to AAA. That was up from $4.09 on Sept. 1 and $3.16 a year earlier.
Why Are States Suspending Gas Taxes?
Gas prices have remained above $4 per gallon for much of the year, prompting states to look for ways to offer drivers relief. Kemp said Georgia has suspended its gas tax several times this year. The Sept. 28 move was the state’s third suspension in 2026.
Indiana’s Braun said he extended his state’s suspension for an additional month to help farmers. He cited the added cost of fuel amid disruptions to global oil supplies.
Gas and oil industry analysts say relief from state gas-tax suspensions is likely to be modest. Patrick De Haan, head of petroleum analysis at GasBuddy, said multiple states were considering measures ahead of the midterms. He also cautioned that drivers may not see lower prices immediately: Stations buy fuel every two to four days, so it can take time for a tax change to show up at the pump.
How Much Is the Federal Gas Tax?
The federal government collects a tax on gasoline purchases nationwide. The current rate is 18.4 cents per gallon, set by a 1993 law. The revenue goes to the Department of Transportation’s Highway Trust Fund, which helps pay for road and transit construction projects.
A suspension or elimination of the federal gas tax would require an act of Congress. The federal highway funding bill was set to expire Sept. 30, but Congress passed a temporary extension through early December. Lawmakers are expected to eventually consider a new transportation funding bill.
Congress has not changed the federal gas-tax rate since 1993. Lawmakers have discussed temporarily suspending it when fuel prices are high, or replacing it with a tax based on miles driven or vehicle weight. Such proposals can raise privacy concerns.
Which States Have the Highest Gas Taxes?
State gas taxes are added to the federal tax. These five states had the highest combined gas taxes and the following average gas prices on Oct. 1, according to the Tax Foundation and AAA:
- California: 74 cents per gallon in taxes; $6.40 average gas price
- Illinois: 70 cents per gallon in taxes; $4.71 average gas price
- Indiana: 63 cents per gallon in taxes; $4.50 average gas price
- Washington: 60 cents per gallon in taxes; $5.49 average gas price
- Pennsylvania: 59 cents per gallon in taxes; $4.50 average gas price
State gas-tax breaks may offer some relief, but the amount and timing depend on the specific suspension and how quickly retailers pass it along. A federal gas-tax holiday would require congressional action.
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