Overview
- The per-gallon state tax rises from 31 cents to roughly 52.4 cents as the 6% sales tax on gasoline is eliminated starting Jan. 1.
- Officials and industry analysts say the higher per-gallon levy should be largely offset by removing the sales tax, so drivers may see only a small pump-price change.
- Michigan’s broader package is projected to add about $1.1 billion to transportation funding in FY2026 and potentially more than $1.8 billion annually, though the Citizens Research Council says about 70% of the increase is not guaranteed.
- Electric and plug-in hybrid owners will pay higher annual registration fees tied to the tax hike, about $100 more for EVs and $50 more for PHEVs.
- In a separate change, New Jersey’s automatic formula raised its gasoline tax by 4.2 cents to 49.1 cents per gallon effective Jan. 1.