The Federal excise tax on gasoline is currently 18.4 cents per gallon. This excise tax generates over $20 billion per year in tax revenue. Revenues are currently 170 times the amount generated in 1933, the first year of the Federal gasoline excise tax. Receipts from this tax are the major source of revenue for the Highway Account and the Mass Transit Account, which together make up the Highway Trust Fund. These taxes are used as a type of user fee. However, in recent years, the gasoline excise tax and the tax on other motor fuels have been used for additional purposes, for example, to reduce the Federal Budget deficit.
It was not until 1919, when Oregon became the first State to pass an excise tax on gasoline, that taxes on gasoline became common. Within 10 years, every State in the Union had adopted a gasoline excise tax . Every State currently imposes an excise tax on gasoline, though the rates vary. In 2005, these taxes generated $35 billion.
1932 - Revenue Act of 1932 creates gasoline excise tax at 1 cent per gallon. 1940 - Revenue Act of 1940 increases gasoline excise tax to 1.5 cents per gallon. 1951 - Revenue Act of 1951 increases gasoline excise tax to 2 cents per gallon. 1956 - Highway Revenue Act of 1956 creates the Highway Trust Fund and increases gasoline excise tax from 2 to 3 cents per gallon. 1959 - Federal-Aid Highways ACt increases gasoline excise tax to 4 cents per gallon.
