Why Six States Are Raising Gas Taxes on July 1 and What Drivers Will Pay

If you drive in California, Washington, Illinois, Maryland, Virginia or Mississippi, your fuel bill is set to climb on July 1. All six states have gas tax increases scheduled for the first day of the month, and in most cases the change happens automatically under formulas written into state law years ago. None of the six will hold a vote this summer. The higher rate simply takes effect, and drivers absorb it one fill-up at a time.

The timing is awkward. The increases land just as families load up for Independence Day road trips, and they arrive even though pump prices nationally have been falling. The good news is that the per-gallon amounts are modest in most states. The catch is that several of these increases repeat every single year, so the gap between what you paid last summer and what you will pay over the next decade keeps widening.

Which Six States Are Raising Their Gas Taxes

California already has the highest state gas tax in the country, and it climbs again on July 1. The California Department of Tax and Fee Administration confirmed the state excise tax rises from 61.2 cents to 63.4 cents per gallon under the annual inflation adjustment built into Senate Bill 1, the Road Repair and Accountability Act of 2017. That is on top of sales tax and other state fees layered onto every gallon, which is a big reason California pump prices sit well above the national average.

Illinois raises its motor fuel tax on July 1 as well. The Illinois Department of Revenue sets the new rate each year using a formula tied to the Consumer Price Index, so the increase is a function of inflation rather than a fresh legislative decision. Washington begins a new chapter on the same date: after lawmakers approved a fuel tax package, the state now adds a 2 percent increase automatically every year, roughly a penny a gallon, unless the legislature steps in to change it.

Maryland, Virginia and Mississippi round out the list. Maryland adjusts its fuel tax annually based on inflation and applies a small increase on July 1. Virginia indexes its fuels tax to inflation through the Department of Motor Vehicles, producing another modest July bump. Mississippi, historically one of the lowest-tax states for fuel, continues a phased increase passed as part of its 2025 infrastructure funding law, lifting the per-gallon rate again on July 1 as the state rebuilds long-neglected roads and bridges.

Why These Increases Happen Without a Vote

The pattern across all six states points to a quiet shift in how road funding works. According to the National Conference of State Legislatures, 25 states now use some form of variable fuel tax rate rather than a fixed number set by statute. Some tie the rate to the wholesale price of fuel, others to a measure of inflation such as the Consumer Price Index or a highway construction cost index. The result is that taxes rise on a schedule, not after a debate.

Supporters argue these mechanisms keep transportation budgets solvent as construction costs rise and as more efficient vehicles, including hybrids and electric cars, burn less fuel per mile and generate less tax revenue. Critics counter that automatic increases reduce accountability, since lawmakers never have to cast a recorded vote to raise what drivers pay. Both points are fair, and both explain why the trend toward indexing is spreading rather than fading.

The broader question is whether the gas tax can survive as the backbone of road funding at all. As fuel economy improves and electric adoption grows, revenue per driver keeps slipping even as the cost of asphalt, steel and labor climbs. That is why a growing number of states are also experimenting with per-mile road usage charges and flat annual fees on electric vehicles, a topic we cover in our guide to how EV charging incentives are changing for American drivers.

What the Increase Means for Your Budget

For a typical household, the July 1 changes amount to a few dollars a month rather than a sudden shock. A penny or two per gallon spread across a 14-gallon tank adds cents to each fill-up. Over a year of regular driving, that might total somewhere between a few dollars and a few tens of dollars per vehicle, depending on the state and how much you drive. California drivers feel the biggest absolute tax burden simply because their combined rate is the highest in the nation.

Context helps here. The increases arrive during a stretch of falling pump prices. AAA pegged the national average for regular unleaded at about $4.16 per gallon on June 8, down roughly 38 cents over the previous month. So even with the tax bump, many drivers in these six states will still pay less at the pump in July than they did in May. The tax change does not reverse that trend, but it does mean the relief is slightly smaller than it would otherwise be.

The longer-term concern is compounding. Because most of these increases repeat annually, a one-cent rise this year stacks on top of last year’s and next year’s. A driver who keeps the same car and the same commute for a decade can end up paying meaningfully more in fuel tax by the end without ever noticing a single large jump. That slow accumulation is precisely what indexed taxes are designed to deliver.

What To Do

You cannot opt out of a state gas tax, but you can soften the blow. Use a fuel price app such as AAA’s Fuel Prices tool, GasBuddy or your map app to find the cheapest stations on your route, since prices can vary 30 to 50 cents per gallon within a single metro area. Filling up early in the week and away from highway exits and airports usually saves money. Keeping tires properly inflated and removing roof boxes when not in use improves fuel economy by a few percentage points, which directly cuts how much tax you pay.

If you are close to a state line, it can pay to know the difference in rates before a long trip, though the savings rarely justify a special detour. For higher-mileage drivers, a more fuel-efficient vehicle or a hybrid can reduce the total tax you pay over a year. And if you want to track how pump prices are moving, our coverage of recent swings in US gas prices breaks down the state-by-state picture in detail.

The takeaway for July is simple. Six states will charge you a little more per gallon, the change happens automatically, and the amounts are small for now. But indexed taxes are built to keep climbing, so the gap between this year and a decade from now is where the real cost lives.

Sources:

• https://www.realclearenergy.org/articles/2026/06/09/meet_the_six_states_celebrating_america_250_by_raising_your_gas_tax_1187464.html
• https://www.cbtnews.com/states-raising-gas-taxes-in-2026/
• https://gasprices.aaa.com/
• https://tax.illinois.gov/research/publications/bulletins/fy-2026-23.html