New Jersey’s gas tax is now the eighth highest in the United States, according to a recent study by the Tax Foundation, a nonpartisan research organization. The state’s 42.3 cents per gallon tax ranks high among U.S. states, following a nearly 1-cent increase last year.
In an article published on NJ Spotlight News, John Reitmeyer asks the question: Is there a change on the way for the NJ gas tax?
A law signed by Governor Phil Murphy earlier this year may push New Jersey further up the list. The legislation allows for potential annual gas tax hikes, with the first likely to take effect on January 1. State financial officials will review gas tax revenues in mid-November to determine the size of the increase.
Currently, the average cost of a gallon of gasoline in New Jersey is about $3.25, down 40 cents from the same time last year, according to AAA New Jersey. The lower prices are attributed to declining demand and a slowing global economy.
The gas tax, which is a combination of state and federal levies, funds New Jersey’s Transportation Trust Fund. This fund supports a $5 billion annual transportation capital program. Recent changes to the law also introduced a new $250 registration fee for electric vehicles, set to rise by $10 annually until reaching $290 in 2028. This fee ensures that electric vehicle owners contribute to the maintenance of the state’s infrastructure.
The renewed law also revised gas tax revenue targets, likely leading to roughly 2-cent increases annually from 2025 to 2029. The timing of the annual analysis used to determine gas tax rates was also adjusted, pushing back the date from August 15 to November 15.
As of earlier this year, California has the highest gas tax at 68.1 cents per gallon, followed by Illinois and Pennsylvania. On the lower end, Alaska’s gas tax is 8.95 cents per gallon, making it the least expensive state for gasoline taxes.
New Jersey’s introduction of the electric vehicle registration fee aligns it with over 30 states that impose similar fees. This move comes as gas tax revenues decline, partly due to the growing popularity of electric and plug-in hybrid vehicles.
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About the Author/s
The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.
