In the United States, the Federal gas tax is a federal excise tax imposed on the sale of gasoline and other fuels. The revenues from the federal gas tax are used to fund federal highway and bridge construction, transportation safety, and other transportation-related projects. The federal gas tax rate is currently 18.4 cents per gallon, and is collected by the Internal Revenue Service (IRS). The tax is part of the federal excise tax system, which also includes levies on the sale of alcohol and tobacco.
How Much is the Federal Gas Tax?
Currently, the federal gas tax rate is 18.4 cents per gallon. This rate applies to all gasoline sold in the United States, including diesel fuel, compressed natural gas, and liquefied natural gas. The federal gas tax rate has not changed since 1993, when it was increased from 14 cents per gallon. The federal gas tax is sometimes referred to as the highway use tax, and is collected by the IRS along with other excise taxes.
How Does the Federal Gas Tax Work?
The federal gas tax is collected by the IRS and distributed to the Highway Trust Fund. The Highway Trust Fund is a special fund established by Congress for the purpose of funding highway and bridge construction and other transportation-related projects. The fund is funded by both the federal government and state governments, and the money is used to pay for the construction and maintenance of roads, bridges, and other transportation infrastructure.
The federal gas tax rate is collected by the IRS when gasoline is sold. This includes both retail and wholesale sales. The federal gas tax is not imposed on gasoline used for agricultural or other non-transportation purposes. The federal government also collects an additional 4.3 cents per gallon of gasoline for the Leaking Underground Storage Tank Trust Fund, which is used to pay for the clean-up of leaking underground storage tanks.
Does the Federal Gas Tax Increase Over Time?
The federal gas tax rate has not changed since 1993, when it was increased from 14 cents per gallon. However, the rate may increase in the future. In recent years, some members of Congress have proposed increasing the federal gas tax to fund infrastructure improvements. While these proposals have not been successful, it is possible that the tax rate may be increased in the future.
What Are the Benefits of the Federal Gas Tax?
The federal gas tax helps to fund important transportation projects, such as highway and bridge construction and maintenance. It also helps to fund transportation safety initiatives, such as installing guardrails and improving traffic signs. Additionally, the federal gas tax helps to reduce air pollution by encouraging drivers to use more fuel-efficient vehicles.
The federal gas tax also helps to generate revenue for the federal government. This revenue can be used to fund other important programs, such as education, healthcare, and infrastructure improvements. Furthermore, the federal gas tax helps to reduce the amount of money the federal government has to borrow from other countries.
Conclusion
The federal gas tax is a federal excise tax imposed on the sale of gasoline and other fuels. The current rate of the federal gas tax is 18.4 cents per gallon, and is collected by the Internal Revenue Service. The revenue from the federal gas tax is used to fund federal highway and bridge construction, transportation safety, and other transportation-related projects. The federal gas tax helps to generate revenue for the federal government, and can be used to fund other important programs.
