From the CSG Archives: State Gas Taxes in 1930
State Government was first produced in April 1930 and was a publication of the American Legislator’s Association, a predecessor of the Council of State Governments. The publication followed pressing state legislative issues of the day, many of which are still relevant today. For example, in October 1930, State Government featured an article about state gas taxes.
Download a PDF version of the original 1930 State Government article: The Growing Gas Tax by Emory Fast
The article by Emory Fast, editorial staff of State Government, explains that every one of the (then) 48 states collected a gasoline tax in 1930, even though it was only 12 years prior that Oregon put into effect the first state gas tax in the nation. Fast goes on to say that, “hardly less phenomenal than the spread of the tax has been the increase in its rates, especially during the last five years”. The average tax rate across the 48 states in 1925 was 2.3 cents per gallon but had increased – or “mounted” as Fast put it—to 3.8 cents in 1930.
In 1930, gas was taxed at a flat excise tax per gallon. Now, it is a little more complicated. Gas is currently taxed by states via an excise tax as well as additional fees. The combined rate of excise taxes and fees is generally referred to as the gas tax rate. The combined tax rate does not, however, include local option taxes which could add up to 19 cents per gallon. All that aside, the average state gas tax rate as of January 1, 2013 was 23.6 cents per gallon, ranging from a low of 8 cents per gallon in Alaska and 14 cents per gallon in Wyoming to a high of 43 cents per gallon in California and 37.75 cents per gallon in North Carolina.
In 1930, seven states - Connecticut, Massachusetts, Missouri, New Jersey, New York, Rhode Island, Wisconsin - each taxed gas at 2 cents per gallon, the lowest rates across all states. The highest state gas tax rate was 6 cents per gallon, levied in only 3 states - Florida, Georgia and South Carolina. When adjusted for inflation, the lowest gas tax rate of 2 cents in 1930 becomes 28 cents and the highest becomes 84 cents - significantly higher rates than present day. In fact, if you adjust the state average gas tax rate in 1930 to 2013 dollars, it is actually more than double the present day average of 23.5 cents.
Data Note: State sales taxes on motor fuels equaled just under $40 billion in 2013 - about 5 percent of total state tax revenue.
The three states with the highest rates in 1930 now have some of the lowest rates. For example, Florida in 1930 taxed gas at a rate of 6 cents per gallon. In today's dollars, that equals 84 cents per gallon. However, Florida's current gas tax is only 16.9 cents per gallon - around 20 percent what it was 85 years ago when inflation is taken into account. A similar story plays out in South Carolina and Georgia: each had 84 cent per gallon taxes in 1930 in today's dollars. Now, South Carolina levies a 16.75 cent per gallon rate and Georgia, a 19.5 cent per gallon rate.
More about the archives:
The Council of State Governments was founded in in 1933 by Senator Henry W. Toll of Colorado as the nation’s only organization serving all three branches of state government. Even before CSG existed, Henry Toll was busy bringing together state leaders to improve communication and share ideas. He was the director of the American Legislator’s Association, which was organized in 1925 and held its first meeting in Denver in July, 1926.
The Association published a monthly magazine, State Government, the first issue of which was published in April 1930 and included a description of the organization:
“This Association has been organized by state legislators throughout the country who recognize the fact that legislative conditions must be improved, and that the responsibility rests primarily upon them. It is absolutely non-partisan; it has no axes to grind.”
The American Legislator’s Association, under Henry Toll’s leadership, eventually became CSG and the State Government publication is the predecessor of CSG's current, award-winning magazine, Capitol Ideas.