Rajan Wilcox
As of 2022, Kentucky drivers pay 26 cents in tax on every gallon of gas they buy. This rate is set to remain unchanged until at least mid-January 2023. The fuel tax in Kentucky is one of the lowest in the region. The price of all motor fuel sold in Kentucky includes federal motor fuel excise taxes, which are collected from the manufacturer by the IRS and used to support the Federal Highway Administration.
| Characteristics | Values |
|---|---|
| Fuel tax rate in Kentucky | 26 cents per gallon |
| National average fuel tax rate | 57.09 cents per gallon |
| Lowest fuel tax rate in the US | Alaska: 8.95 cents per gallon |
| Highest fuel tax rate in the US | Pennsylvania: 57.6 cents per gallon |
| Fuel tax rate in Kentucky compared to other states | One of the lowest rates |
| Penalty for filing a tax report late | 2% of tax due for each 30 days that the report is late, not exceeding 20% of the total tax due and not less than $10 |
| Penalty for failing to file a tax report | 5% of the tax assessed for each 30 days that the report is not filed, not exceeding 50% of the tax assessed and not less than $25 |
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What You'll Learn
Kentucky fuel tax is 26 cents per gallon
As of 2022, Kentucky levies a fuel tax of 26 cents per gallon of gasoline. This rate is unchanged from mid-January 2023. In comparison to other states, Kentucky has one of the lowest fuel tax rates. The national average fuel tax is 57.09 cents per gallon, with Pennsylvania, California, and Washington state having the highest rates at 57.6, 56.6, and 49.4 cents per gallon, respectively. On the other hand, Alaska, Hawaii, and Mississippi have the lowest rates, with Alaska and Hawaii at 8.95 and 16 cents, respectively, while Mississippi imposes an 18.4-cent fuel tax per gallon.
Kentucky's fuel tax rate of 26 cents per gallon is intended to remain in effect until at least mid-January 2023. This rate was decided after Governor Andy Beshear halted an increase in the state's gas tax. The increase would have raised the fuel tax rate to 28 cents per gallon. With the current rate, Kentucky's fuel tax is still considered one of the lowest in the region, even when compared to bordering states.
The fuel tax in Kentucky is included in the price of gasoline paid by drivers. While the fuel tax has remained stable, fuel prices in the state have continued to rise. As of Wednesday, the average cost of a gallon of gas in Kentucky was $4.55, which is not significantly different from the national average of $4.71. Part of the fuel cost includes federal motor fuel excise taxes, which are collected by the IRS to support the Federal Highway Administration.
The fuel tax rate in Kentucky is important for several reasons. Firstly, it affects the cost of gasoline for Kentucky drivers, impacting their commuting and travel expenses. Secondly, the fuel tax revenue contributes to funding transportation-related programs and infrastructure improvements. By collecting fuel taxes, the state generates income to maintain and enhance Kentucky's road network, making travel safer and more efficient for residents and visitors alike.
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Federal tax rates are also included in the price
The price of motor fuel in Kentucky includes federal motor fuel excise taxes, which are collected from the manufacturer by the IRS. These taxes are used to support the Federal Highway Administration. The federal excise tax rates on various motor fuel products are as follows:
- Gasoline, diesel, kerosene, and compressed natural gas include a 0.1 ¢ per gallon charge for the Leaking Underground Storage Tank Trust Fund (LUST).
- These tax rates are based on energy content relative to gasoline.
The federal tax rate is included in the price of fuel in Kentucky, which was 26 cents per gallon in 2022. This rate is unchanged as of January 2023. The average cost per gallon of gas in Kentucky was $4.55, which is not far off from the national average of $4.71 per gallon.
Kentucky has one of the lowest fuel tax rates in the region. The state with the highest total state gas tax rate in the US is Pennsylvania at 57.6 cents per gallon, followed by California at 56.6 cents and Washington at 49.4 cents. The states with the lowest total state gas tax rates are Alaska at 8.95 cents, Hawaii at 16 cents, and Mississippi at 18.4 cents.
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The national average is 57.09 cents per gallon
The national average for fuel tax is 57.09 cents per gallon. In comparison, Kentucky drivers pay significantly less tax on fuel, at 26 cents per gallon. In 2022, Kentucky's governor, Andy Beshear, halted an increase in the state's gas tax, which would have brought it up to 28 cents per gallon. This action kept Kentucky's gas tax below the national average and among the lowest rates in the region.
The national average for fuel tax includes all state taxes and fees. While some states have higher rates, such as Pennsylvania at 57.6 cents and California at 56.6 cents, others have much lower rates. Alaska, for example, has the lowest gas tax in the nation at 8.95 cents per gallon. Hawaii and Mississippi also have relatively low gas tax rates, at 16 cents and 18.4 cents, respectively.
The variation in gas tax rates across the United States can be attributed to several factors, including each state's unique economic conditions, infrastructure needs, and political landscape. Additionally, the revenue generated from fuel taxes may be designated for different purposes depending on the jurisdiction. In some states, the revenue is primarily allocated to transportation-related programs, such as improving road infrastructure. In other states, the funds may be directed towards a general fund, supporting a broader range of programs and services.
The national average fuel tax rate of 57.09 cents per gallon is a significant cost factor for drivers across the country. While Kentucky currently has a lower fuel tax rate, the gap between the national average and Kentucky's rate highlights the potential financial burden on drivers in other states with higher fuel tax rates. It's important to note that fuel tax rates can change over time due to various factors, such as changes in state policies, economic conditions, or infrastructure development needs.
The national average fuel tax rate of 57.09 cents per gallon also has implications for the trucking industry and the cost of goods. With long-haul trucks often travelling across multiple states, the varying fuel tax rates can impact the operating costs for trucking companies and potentially affect the prices of goods being transported. Additionally, the national average fuel tax rate can influence discussions around fuel efficiency, alternative fuel sources, and federal intervention in fuel pricing.
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Kentucky has one of the lowest rates
Kentucky has one of the lowest fuel tax rates in the region. In 2022, Kentucky drivers paid 26 cents in tax per gallon of gas. This is significantly lower than the national average of 57.09 cents per gallon. In fact, even if a planned increase in the state's gas tax had gone into effect, Kentucky's fuel tax rate would still be lower than that of six bordering states.
The tax on fuel in Kentucky includes Federal motor fuel excise taxes, which are collected from the manufacturer by the IRS. These taxes are used to support the Federal Highway Administration and include a 0.1 cents per gallon charge for the Leaking Underground Storage Tank Trust Fund (LUST).
Kentucky's low fuel tax rate can be contrasted with states such as Pennsylvania, which had the highest total state gas tax rate in the nation at 57.6 cents per gallon, followed by California at 56.6 cents and Washington state at 49.4 cents. Even when compared to states with lower fuel tax rates, such as Alaska (8.95 cents), Hawaii (16 cents), and Mississippi (18.4 cents), Kentucky's fuel tax rate is highly competitive.
The relatively low fuel tax rate in Kentucky can have implications for both drivers and the state's finances. While drivers may benefit from lower costs at the pump, the state may collect less revenue from fuel taxes, which can impact funding for transportation-related programs and infrastructure improvements. However, it is worth noting that fuel prices in Kentucky have been rising, and it remains to be seen if the state's fuel tax rate will remain unchanged in the long term.
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Fuel prices continue to rise
In 2022, Kentucky drivers were paying 26 cents tax on a gallon of gas. While this is already low compared to other states, an increase to 28 cents per gallon was halted by Gov. Andy Beshear. This action means that the rate will remain unchanged until at least mid-January 2023.
The Federation of Tax Administrators (FTA) reports that even with the planned increase, Kentucky's total gas tax rate would still be lower than six bordering states. For example, Pennsylvania has the highest total state gas tax rate in the nation at 57.6 cents per gallon, followed by California at 56.6 cents and Washington at 49.4 cents.
In contrast, the states with the lowest total state gas tax rates include Alaska at 8.95 cents per gallon, Hawaii at 16 cents, and Mississippi at 18.4 cents. Kentucky's fuel tax rate is also lower than these states, further emphasizing its relatively low fuel tax.
The price of motor fuel in Kentucky includes Federal motor fuel excise taxes, which are collected by the IRS to support the Federal Highway Administration. These taxes are based on energy content relative to gasoline and include a 0.1 cents per gallon charge for the Leaking Underground Storage Tank Trust Fund (LUST).
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Frequently asked questions
Kentucky drivers pay 26 cents in tax per gallon of gas.
Kentucky has one of the lowest fuel tax rates in the region. The state with the lowest fuel tax rate is Alaska, with a rate of 8.95 cents per gallon. The highest total state gas tax rate in the US is in Pennsylvania, at 57.6 cents per gallon.
The price of motor fuel in Kentucky includes Federal motor fuel excise taxes, which are used to support the Federal Highway Administration.
The average cost per gallon of gas in Kentucky was $4.55, which is close to the national average of $4.71 per gallon.
The fuel tax rate in Kentucky is set by the state government. In 2022, Governor Andy Beshear halted an increase in the state's gas tax, keeping the rate at 26 cents per gallon until at least mid-January 2023.
