Maryland gas tax will go up to 47 cents per gallon in July

This content was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

Maryland motorists will have to dig a little deeper at the gas pump starting July 1.

The state tax rate of a gallon of gas will increase to 47 cents per gallon, an increase of more than 10% compared to the current rate. Over the last two years, the rate has increased by 30% due to inflation and surging fuel prices.

Owners of diesel-powered vehicles will experience a similar increase with the state gas tax increasing from nearly 43.5 cents per gallon to nearly 47.8 cents per gallon on July 1. Over the last two years, the state tax on diesel has increased by more than 29%.

Information regarding the tax increase was published on the state comptroller’s website this week. A letter was sent to Gov. Wes Moore (D), Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore) informing them of the July 1 increase.

In the letter, Robert J. Rehrmann, director of the Board of Revenue Estimates, said the increase was driven almost equally by inflation and the average price of a gallon of gas over the last year.

Inflation rose 7.1% between May 2022 and April 2023 — just shy of the 8% limit built into a decade-old law. That increased the per gallon state surcharge by 2.1 cents per gallon.

Rehrmann said high motor fuel prices — based on the average price of a gallon of gas — added another 2.2 cents to the state tax.

The increase is on top of the federal tax of 18.3 cents per gallon for regular fuel and 23.4 cents per gallon for diesel. Those tax rates have remained in place since 1993.

By law, the comptroller’s office must set the new state gas tax rate by June 1. It’s based on a formula that takes into account the annual rate of inflation as well as the average cost of a gallon of gas over a year.

A spokesperson for Comptroller Brooke E. Lierman (D) said an announcement had not yet been made. The comptroller’s office did not immediately respond to questions about the increase.

Maryland’s motor fuel tax has been tied to inflation since 2013. That year, the legislature passed the first increase in the tax in more than two decades.

Lawmakers that year, in an effort to avoid future votes on a politically charged tax, linked future increases to a calculation of annual inflation. At the time, sharp rises in inflation were few and far between.

Last year, that trend ended as gas prices rose at the pump and inflation increased to levels not seen in four decades. The result was a 6.7 cents per gallon increase.

Republicans in the legislature over the last couple of years have unsuccessfully mounted efforts to repeal the automatic increase tied to inflation.

This article was written by WTOP’s news partners at Maryland Matters and republished with permission. Sign up for Maryland Matters’ free email subscription today.

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