Michigan gas tax increases January 1, 2022


I just published an article last Friday titled “Michigans Are Burying Inflation, Here Are Some Examples”. We now learn that the state of Michigan will increase our fuel tax via an increase in the cost of living effective January 1, 2022.

The Michigan Capitol Confidential of the Mackinac Center for Public Policy has informed us of the New Year’s gift. House Bill 4738: Increase the tax on gasoline and diesel Public Law 176 of 2015 was passed in 2015 and with that bill came an inflation-based trigger. This bill also brought us the tax increase of 7.3 cents per gallon and a very steep increase in annual vehicle registration fees / taxes / license plates.

How much will this increase cost us? If the inflation rate is 5% or more, our state gasoline tax will drop from 26.3 cents to 27.7 cents per gallon. Right now, inflation is around 5.8%.

What are we currently paying per gallon of Michigan gasoline tax?

  • The federal tax on gasoline is 18.4 cents per gallon
  • state gasoline tax is 26.3 cents per gallon
  • You also have the privilege of paying 6% state sales tax.

If a gallon of gasoline costs $ 3.20, you would pay 18.4 cents in federal tax plus 26.3 cents state tax and an additional 17 cents in Michigan sales tax. This would bring your total gasoline tax bill at 61.7 cents per gallon. This ranks Michigan as the 10th highest tax per gallon of gasoline in the country.

Welcome to Michigan!


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