(The Center Square) – Economy-minded people in Michigan may want to fill up vehicles on New Year’s Eve before the ball drops to save roughly 21 cents per 15-gallon fill up when the tax automatically increases 1.4 cents per gallon from 27.2 cents per gallons.
The new 2023 tax will be 28.6 cents per gallon.
Michigan has the sixth-highest total gas tax in the nation, 70.1 cents per gallon, when the 18.4-cent per gallon federal gas taxes, the state fuel tax and 6% state sales tax are all factored.
The 2023 increase comes from former Gov. Rick Snyder, a Republican who served two terms between 2011 and 2019. Snyder signed an annual gas tax increase for each year beginning in 2022. The increases are pegged to whichever is lower – either a standard 5% jump or the inflation rate. Because inflation this year has been consistently near 8%, the 2023 increase will be 5%.
According to the Tax Foundation, the annual increase applies to gasoline, diesel and alternative fuels. The tax has risen from 19 cents per gallon in 2016 to 28.6 cents per gallon in the new year. Revenues from the sales tax fund road and infrastructure repairs.
Michigan’s sixth-place ranking is behind first-place California (84 cents per gallon); second-place Illinois (82 cents per gallon); third-place Indiana (82 cents per gallon); fourth-place Pennsylvania (77 cents per gallon); and fifth-place Washington (71 cents per gallon).
Alaska had the lowest total gas taxes in the nation at 27 cents per gallon. New York was close behind due to the state suspending its gas tax as prices spiked at the pump this past year. Michigan legislators attempted to suspend the state’s gas tax, but could not reach an agreement with Michigan Gov. Gretchen Whitmer, a Democrat.
States with the lowest gas tax include Alaska, New York (which suspended some gas taxes from June to December 2022), Mississippi, Hawaii and New Mexico.
Gas prices have dropped significantly over the past month. According to AAA, the national average for a gallon of regular gas is $3.01. Michigan’s average cost for a gallon of regular gas is slightly lower at $2.98. The average price nationally for a gallon of regular gas last June was $5.01. In Michigan, the average price for a gallon of regular gas last June was $5.22.
