Tax Rate on Gasoline

Fuel Tax Swap Explanation

In March 2010, Governor Arnold Schwarzenegger signed two fuel tax measures (AB x8 6 and SB 70), commonly referred to as the fuel tax swap, which adjusted the rates of the sales and excise tax on gasoline, effective July 1, 2010. The fuel tax swap legislation was designed to be revenue neutral, ensuring overall state taxes paid by consumers at the pump are the same as they would have paid under the prior tax structure.

Thus, the fuel tax swap legislation does not produce a net revenue gain in overall state taxes paid at the pump. The legislation mandated the BOE to adjust the excise tax rate every year by March 1. The new rate is effective July 1 of each year.

The Board voted unanimously on February 24, 2015 to lower the excise tax rate for gasoline by $0.06 for Fiscal Year 2015-16. The new excise tax rate of $0.30 per gallon for gasoline will be effective July 1, 2015.

BOE's Role:

  • State law currently imposes a sales tax and an excise tax on motor vehicle fuel.
  • The legislation mandates the BOE adjust the excise tax rate annually by March 1.

Excise Tax Rate Set by BOE Each Fiscal Year

Fiscal Year Excise Tax Rate
2015-16 $0.30
2014-15 $0.36
2013-14 $0.395
2012-13 $0.360
2011-12 $0.357
2010-11 $0.353
2009-10 $0.18

Where your money is going:

The 2.25 percent sales tax on gasoline primarily funds local government; the excise tax is dedicated to public roads and mass transit. For more fuel statistics, including taxable gallon distributions and revenue, visit the OPEN BOE data portal.

The graph below shows the amount of money collected in excise tax revenue and the excise tax rate from the fiscal year before the fuel tax swap took effect and every year since. The graphic shows combined excise and sales tax revenue from Fiscal Year 2004-05 to 2013-14.

Fiscal Year Gallons Sold Excise Tax Rate Excise Tax Revenue
2013-14 14,599,336,000 $0.395 $5,763,417,000
2012-13 14,475,836,000 $0.360 $5,206,304,000
2011-12 14,608,032,000 $0.357 $5,221,980,000
2010-11 14,740,132,000 $0.353 $5,203,759,000
2009-10 14,819,049,000 $0.18 $2,668,891,000
Graph of gasoline sales and excise tax revenues from Fiscal Year 2004-05 to Fiscal Year 2013-14.
Click here to download a higher resolution graphic

How The 2.25 percent sales tax on gasoline is broken down:

  • 1.0% Bradley-Burns local tax
  • 0.25% Fiscal Recovery Fund to pay for Economic Recovery Bonds (RTC section 6051.5)
  • 0.50% Local Public Safety Fund (Sec. 35, Article XIII)
  • 0.50% Local Revenue Fund (RTC section 6051.2)

*The Proposition 30 quarter percent sales tax increase does not apply to gasoline sales, and is not factored into the adjustment of the excise tax rate for gasoline