10 States With the Lowest Gas Tax

I'm a few weeks away from a multi-state, 700-mile trek for a family vacation, and I've got my eye on gas prices as I prepare. I'll soon be driving through two states with some of the highest gas taxes (I'm looking at you, New Jersey and Pennsylvania), but plenty of states have relatively low taxes.

Gas prices fluctuate based on many factors, including demand and distribution, but one thing that all states have in common is that they charge gas taxes. Let's take a closer look at the ones that charge the least.

Ten states with the lowest gas taxes

Each state sets its own tax rates, and the amount they charge can change from year to year. Here are the 10 states that charge drivers the lowest gas tax, and how much they charge per gallon of unleaded gas:

1. Alaska: $0.09
2. Hawaii: $0.16
3. New Mexico: $0.17
4. Arizona: $0.18
5. Mississippi: $0.18
6. New York: $0.18
7. Oklahoma: $0.19
8. Louisiana: $0.20
9. Texas: $0.20
10. Colorado: $0.22

While exceptions exist, many states with low gas taxes also have lower gas prices. For example, six of the top 10 states with the lowest gas prices also have the lowest taxes, including Mississippi, Oklahoma, Louisiana, Texas, Colorado, and New Mexico.

The exception to this is Hawaii, which has the second-lowest state gas tax in the country but the second-highest overall price of $4.80 per gallon. Driving around paradise is expensive, thanks to the high cost of transporting gas to the Hawaiian islands.

Taxes aren't the main driver of gas prices

Right now, the cheapest gas price for regular unleaded is in Mississippi, with an average price of $3.07 per gallon. Meanwhile, the highest average price is in California at $5.28.

Politicians often take the heat for rising gas prices, but many contributing factors make up the price you pay at the pump. According to the Environmental Protection Agency (EPA), the main drivers of gas prices are:

• The cost of crude oil: 57.1% of gas price
• Oil refining costs and profit: 17.7% of gas price
• Federal and state taxes: 12.8% of gas price
• Distribution and marketing costs: 12.4% of gas price

All of these factors have one thing in common: They're completely out of your control. And while gas taxes and high gas prices can be bad for your budget, there's one part of your monthly car expenses that you can influence.

One car expense you can control

Rising gas prices aren't the only car expense drivers should be paying attention to right now. Car insurance costs rose 20% in 2023. The good news is that you can likely lower your insurance costs by taking the time to shop around with different companies.

I recently got an online comparison quote for car auto insurance, which was $32 cheaper per month than what I'm paying now. A recent study by the insurance app Jerry noted that when drivers shop for cheaper car insurance, 60% of them find it.

Once I return from my vacation, I'll follow up on my insurance quote to see if I can get the same coverage for a lower price. I can't control the price of gas or how much tax I'm paying every time I fill up, but lowering my monthly insurance bill will likely have a bigger effect on my budget than the price of gas over the long term.