California Fuel Taxes and Vehicle Fees Increased


This article is reproduced with permission from Spidell Publishing, Inc.

SB 1 (Ch. 17-5) increased the following fuel tax rates effective November 1, 2017:

  • Gasoline excise tax, by 12¢ per gallon (according to California Board of Equalization (BOE)’s legislative analysis, in combination with the repeal of the fuel-tax swap adjustment rate, this will result in an increase from the current rate of 27.8¢ to 41.7¢ per gallon).
  • Diesel fuel excise tax, by 20¢ per gallon from 16¢ to 36¢.
  • Diesel fuel sales and use tax, by 4% from 1.75% to 5.75%.

A new one-time gasoline floor-stock tax (aka storage tax) is imposed against suppliers, wholesalers, or retailers owning 1,000 or more gallons of gasoline or diesel fuel on November 1, 2017, to bring the tax paid on the stored fuel in line with the tax that will be paid effective November 1, 2017.

In addition to the current 0.65% vehicle license fee (VLF) imposed on California-registered vehicles, SB 1 imposes a new annual transportation improvement fee, effective January 1, 2018. The amount of the fee is based on the market value of the vehicle (determined in the same method used for determining the current VLF fee) as follows:

  • $25 for vehicles with a market value of $0 – $4,999.
  • $50 for vehicles with a market value of $5,000 – $24,999.
  • $100 for vehicles with a market value of $25,000 – $34,999.
  • $150 for vehicles with a market value of $35,000 – $59,999.
  • $175 for vehicles with a market value of $60,000 and higher.

Annual inflation adjustment will be made to the gasoline excise tax, the diesel fuel excise tax, and the transportation improvement fees beginning July 1, 2020.

For more information about this article, please contact our tax professionals at taxalerts@windes.com or toll free at 844.4WINDES (844.494.6337).