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States Fuel Infrastructure With Gas Taxes CCH Survey Shows States Are Still Keeping Lid on Sales Taxes, Few
Cigarette Tax Increases
(RIVERWOODS, Ill., August 10, 1999) As many Americans drive to
the beach, the woods or a national park this summer, they will be paying higher taxes to
build and repair the highways they travel over, according to CCH INCORPORATED
(CCH), a leading provider of tax and business law information. An annual survey by CCH
shows that while a number of states have increased gas prices between last summer and
this, state sales tax rates and taxes on cigarettes are largely unchanged.
With state finances in generally good shape, legislators and governors have been able
to avoid increasing high-visibility taxes such as income taxes and the sales tax, CCH
analyst Ken Traisman, JD, noted.
"Rather, states have found it easier to justify raising gasoline taxes, which are
usually dedicated to improving the states infrastructure. In addition, with gas
prices relatively low during the past year, there has been little resistance to the
increased tax rates."
Gasoline Taxes Up
States raising their gasoline taxes include Arkansas, from 18.5 to 19.5 cents per
gallon, Kansas, from 18 to 20 cents, Nebraska, from 23.5 to 24.1 cents, North Dakota, from
20 to 21 cents, South Dakota, from 21 to 22 cents and Wisconsin, from 25.4 to 25.8 cents.
North Carolina cut its gas levy modestly, from 21.6 cents to 21.2 cents per gallon.
Half the states and the District of Columbia charge 20 cents a gallon or more in
gasoline taxes. The state of Connecticut charges the most for a fill-up, 32 cents per
gallon, while at 4 cents per gallon Florida charges the least.
Sales Taxes Largely Unchanged
Only one state has raised its sales tax since July of 1998: Nebraska from 4.5 percent
to 5 percent. One state, Maine, lowered its sales tax from 6 percent to 5.5 percent.
Five states still do not charge a sales tax: Alaska, Delaware, Montana, New Hampshire
and Oregon. (Delaware has a merchants and manufacturers license tax and a use
tax on personal property leases.) Elsewhere, rates range from a low of 3 percent in
Colorado to a high of 7 percent in Mississippi and Rhode Island.
Few States Raise Cigarette Taxes
Although cigarette tax hikes were common in 1997 and 1998, since last summer, only two
states have changed their cigarette levies. Smokers now cough up 87 cents to the state of
California for every pack they buy, an increase of 50 cents over this time last year, and
the price of puffing in Maryland increased by 30 cents, to 66 cents a pack. Twenty-two
states collect more than 40 cents per pack of cigarettes, and in two states, Alaska and
Hawaii, smokers must pay $1.00 in state taxes alone for every pack.
State Lines Make a Difference
With a patchwork of tax rates enacted by the several states, travelers can plan their
routes with tax savings in mind.
Vacationers traveling through the Northeast might want to plan on fill-ups in New York
(8 cents per gallon gas tax), New Jersey (10.5 cents) and New Hampshire (18 cents) rather
than Connecticut (32 cents) or Rhode Island (28 cents). If theyre planning to shop,
they should consider Delaware, where they will pay no sales tax, and avoid Rhode Island,
with its nation-high 7 percent rate.
In the South, Florida has the best deal for motorists with its 4 cents per gallon gas
tax. North Carolina has the highest gas tax in the South, at 21.2 cents, but thats
not much more than the median rate of 20 cents per gallon. Virginia has the lowest sales
tax in the South, at 3.5 percent, while Mississippi, at 7 percent, has the highest.
Drivers in the Midwest will want to fill up in Indiana, where theyll pay a fuel
tax only 15 cents per gallon rather than Wisconsin, which collects 25.8 cents per gallon.
Missouri has the lowest sales tax in the countrys midsection, at 4.225 percent,
while shoppers at Minnesotas Mall of America will pay the most 6.5 percent.
Those headed west will find the lowest gas taxes in Wyoming (14 cents) and New Mexico
(17 cents) while at 27 cents a gallon, Montana is the most expensive western state from a
fuel tax point of view. On the other hand, the Big Sky State is a bargain for anyone
buying anything other than gas it has no sales tax.
Cigarette smokers experience drastic changes in what they pay for a pack due to the
wide variance in tax rates in differing regions and across state lines.
Tobacco-producing states such as Kentucky (3 cents per pack), North Carolina (5 cents)
and South Carolina (7 cents) are notably smoker-friendly. Friendliest of all is Virginia,
with a 2.5 cents per pack tax, which is especially attractive for smokers in the
neighboring District of Columbia, where the rate is 65 cents per pack.
Indiana, with its 15.5 cent per pack tax, pulls in smokers from bordering Ohio (24
cents per pack), Illinois (58 cents) and Michigan (75 cents). In the West, it can pay for
smokers to head East. Crossing the border from California to Nevada lowers the per-pack
tax from 87 to 35 cents. Traveling north to Idaho takes the rate down to 28 cents. The
smoker who then continues east to Wyoming attains the lowest rate west of the Mississippi:
12 cents per pack.
About CCH INCORPORATED
CCH INCORPORATED, founded in 1913, has served four generations of business
professionals and their clients. The company produces approximately 700 print and
electronic products for tax, legal, securities, human resources, health care and small
business markets. CCH is a wholly owned subsidiary of Wolters Kluwer U.S. The CCH web site
can be accessed at www.cch.com.
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EDITORS NOTE: Illustrative charts and graphs of state taxes data are available by
contacting Leslie Bonacum at 847-267-7153 or firstname.lastname@example.org.