Washington's gas tax increased July 1 under a new inflation-indexing law, while several states and Canada have reduced or suspended fuel taxes to provide relief at the pump. (Photo: Rep. Jim Walsh)
OLYMPIA, Wash. — Washington drivers will pay more at the pump beginning Wednesday as the state’s gasoline tax automatically increases under a new law tying fuel taxes to inflation.
Beginning July 1, the state gasoline tax increases from 55.4 cents to 56.5 cents per gallon. Diesel taxes also increase from 58.4 cents to 59.5 cents per gallon. The 2% increase is the first automatic adjustment under a transportation funding package approved by lawmakers in 2025.
The change comes as several states and Canada have recently frozen, suspended or reduced fuel taxes to lower costs for drivers.
Washington Gas Tax Increase Takes Effect
Unlike previous fuel tax hikes, Washington’s new law permanently indexes gasoline and diesel taxes to inflation. Beginning this year, the rates will automatically increase every July unless lawmakers change the law.
Washington State Republican Party Chair Jim Walsh said drivers may notice higher prices immediately.
Tomorrow, July 1, you will be seeing prices go up in most places. You may see some prices going up today in anticipation of a higher tax tomorrow.
— Jim Walsh, Washington State Republican Party Chair
Walsh said the increase comes from legislation signed last year that automatically adjusts fuel taxes each year.
Washington now collects 56.5 cents per gallon in state gasoline taxes and 59.5 cents on diesel. Combined with the federal gasoline tax, motorists pay roughly 75 cents per gallon in fuel taxes before other state fuel programs are included.
Supporters of the transportation package say the annual adjustment helps keep funding for highways, bridges and ferries in line with inflation.
Automatic Increases Become Annual
Walsh said the new law removes the need for lawmakers to vote on future fuel tax increases.
It will automatically go up with no further action on the part of the Legislature. It is now indexed, so it will automatically go up with no further action by the Legislature.
— Jim Walsh, Washington State Republican Party Chair
Washington already has one of the nation’s highest fuel taxes. The state also consistently ranks among the most expensive places in the country to buy gasoline.
Unless lawmakers amend the law, the fuel tax will continue increasing each July based on inflation.
Other States Have Taken a Different Approach
Washington’s increase contrasts with actions taken elsewhere in 2026.
At least four states have enacted temporary fuel tax relief this year. Georgia suspended its motor fuel excise tax after Gov. Brian Kemp signed House Bill 1199. Indiana implemented a Fuel Use Tax Holiday beginning in April before Gov. Mike Braun extended the suspension and approved reimbursements for local governments. Utah also temporarily reduced state fuel taxes to provide relief for motorists.
Kentucky went even further.
Gov. Andy Beshear canceled the state’s scheduled July 1 fuel tax increase and ordered a 10-cent-per-gallon reduction after declaring a state of emergency over rising fuel prices.
The pain at the pump is hurting Kentucky families.
— Kentucky Gov. Andy Beshear, executive order
Beshear estimated the order would save Kentucky motorists about $27 million each month.
Canada has also suspended federal fuel taxes through early September. Prime Minister Mark Carney said the move will reduce gasoline prices by up to 10 cents per liter.
Washington Republicans Push Back
As Washington’s increase takes effect, Republican lawmakers are again calling on Gov. Bob Ferguson to provide fuel tax relief.
Walsh said drivers should distinguish between the automatic gas tax increase and the state’s Climate Commitment Act carbon pricing program.
Your direct sales tax and your indirect carbon tax are two different taxes on the price of gas and diesel here in Washington. Together they count for about a dollar and a half a gallon in state tax.
— Jim Walsh, Washington State Republican Party Chair
State Sen. Judy Warnick, R-Moses Lake, said Washington should follow the example set by other states.
When Washingtonians are paying some of the highest gas prices in the country, it isn’t an accident; it’s a choice made by Olympia.
— State Sen. Judy Warnick, R-Moses Lake
Warnick argued that Washington’s fuel prices are driven by the gas tax, the Climate Commitment Act and the Low Carbon Fuel Standard. She urged Ferguson to suspend policies she says artificially increase fuel prices and work with lawmakers to eliminate the new annual inflation adjustment.
“Washingtonians need and deserve the same relief,” Warnick said. “While the rest of the country looks forward to relief at the pump as global supply chains reopen, Washingtonians are being left behind because the state’s Democrat leaders are standing in the way.”
What Comes Next
Washington remains among the nation’s most expensive states for gasoline, according to AAA.
Supporters of the inflation-indexed fuel tax say it provides stable funding for transportation projects as construction costs continue to rise. Critics argue automatic increases add to the cost of living at a time when other states are temporarily reducing fuel taxes.
Unless state lawmakers change the law, Washington’s fuel tax will automatically increase again next July.
Frequently Asked Questions
About the Author
