Tax fights are heating up in statehouses. Gas taxes and diesel taxes are front and center out West.
In the past year alone, more than a dozen states have tweaked their fuel tax rates – some jacked them up, others cut them down.
Utah
Fuel tax relief is on the horizon for many Utah drivers.
Gov. Spencer Cox announced deals to boost fuel supply, expand refinery power, and cut the state gas tax. The diesel tax rate will not change.
Lawmakers also passed a bill to speed up permit approvals and clear red tape for new pipelines coming into Utah. Supporters say that the move will pump more fuel into the state.
The governor said bigger fixes will take time, but motorists should see relief right away.
Starting July 1, Utah’s 39-cent state gas tax will drop by 15%. That’s about a 6-cent cut, bringing it down to roughly 33 cents. The diesel tax rate will stay at 37.9 cents.
The state budget will cover the cost of the tax cut.
The gas tax break is part of a larger push to expand pipelines, add storage, and allow refineries to boost supply when demand spikes.
State leaders say changes could bring in nearly 800,000 more gallons of fuel into the market each day.
Supporters argue that more supply means more competition – and lower prices at the pump.
“Utah is choosing an abundance mindset. That means we don’t wait for problems to hit families at the pump,” Cox said.
Oregon
Oregon’s gas tax fight is far from over.
Last year, Gov. Tina Kotek signed a road funding deal that raised the gas tax by 6 cents. The increase was set to take effect on Jan. 1.
Then voters hit the brakes.
A petition drive put the hike on hold until voters can decide this fall. But truck tax changes in the same package are not affected by the public vote.
Democrats now want to move the vote up to May. They say the state needs funding certainty. Republicans fire back, saying it’s a political move to avoid angry voters in the fall.
Lawmakers held days of public hearings. Nearly 5,000 people testified – most against speeding up the vote.
The Senate passed SB1599 on a 17-13 vote. House lawmakers are expected to weigh in soon.
The gas tax referendum always belonged on the November ballot. Now that the deadline to move it has passed, the ONLY way to avoid disenfranchising voters is to consider SB 1599 dead and keep the vote in November. It’s actually that simple. @BruceStarrhttps://t.co/92Fn4SGW7z pic.twitter.com/nnbAGQ8Pzi
— Oregon Senate Republicans (@ORSenateGOP) February 26, 2026
California
In California, one lawmaker wants to slam the brakes on fuel taxes for a year.
The state gas tax sits at 61.2 cents per gallon. Diesel is 46.6 cents.
Assemblyman Jeff Gonzalez, R-Indio, is pushing for a tax holiday. AB1745
would use the state’s General Fund to pay for road work over that time.
“It’s time to suspend the gas tax. Californians are tired. They are tired of being squeezed. And they are tired of being treated like an unlimited revenue source,” Gonzalez said. “It’s time to deliver relief.”
Critics warn the move would punch an $8 billion hole in the state budget. They also say there’s no promise drivers would see lower prices at the pump.
The bill is in the Assembly Transportation Committee, facing a rough road ahead.
Arizona
Fuel tax relief is also heating up in Arizona.
The state charges 18 cents per gallon on gas. The diesel rate is 26 cents.
House lawmakers voted 32-24 to advance HB2400. The bill would pause gas taxes and diesel taxes for six months each year in parts of the Phoenix area.
The bill would stop fuel taxes in Maricopa County and parts of Pinal County from May through October.
Rep. Julie Willoughby, R-Chandler, said the move would help offset federal rules that require a special fuel blend in warmer months – a blend that costs more.
She noted that Phoenix drivers paid more for fuel than Los Angeles drivers in 2023.
With California refineries shutting down, she warned supply could tighten, and prices could spike even higher.
The bill would shift $72.6 million a year from highway funds to cover the tax break.
Willoughby called it a fairness issue, even if it’s not a perfect fix.
The bill has moved to the Senate. LL
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