The Connecticut gas tax on gasoline is a fixed 25 cents per gallon, plus a wholesale-level Petroleum Products Gross Earnings Tax that can add up to about 24.3 cents more depending on fuel prices. Diesel is taxed under a separate, annually recalculated rate that sits at 48.9 cents per gallon from July 1, 2025 through June 30, 2026. Federal excise taxes stack on top of the state taxes, pushing the total tax embedded in a gallon of regular gasoline toward 68 cents when wholesale prices are at or above the cap, and past 70 cents on diesel.
How the Gasoline Tax Is Built
Two separate state taxes hit a gallon of gasoline before you ever see the price on the pump sign.
The first is the Motor Vehicle Fuels Tax under C.G.S. § 12-458, a flat 25 cents per gallon on gasoline and gasohol. That rate has been in place since July 2000 and does not move with market prices.1Justia. Connecticut Code 12-458 – Returns. Rate and Payment of Tax. Exemptions. Penalties. Distributors collect it and pass it through to retailers, who fold it into the retail price.
The second is the Petroleum Products Gross Earnings Tax under C.G.S. § 12-587. It is assessed at 8.1 percent of a distributor’s gross earnings from the first sale of petroleum products in Connecticut.2Justia. Connecticut Code 12-587 – Definitions. Imposition of Tax. Exemptions. Rate. Returns and Filing; Due Date. The tax is levied on the distributor, not the driver, but the cost gets baked into what you pay at the pump.
To stop this second tax from spiraling during oil price spikes, state law caps the calculation for gasoline and gasohol. When the wholesale price exceeds $3.00 per gallon, the gross earnings are treated as if the price were exactly $3.00, and anything above that is excluded from the tax base.2Justia. Connecticut Code 12-587 – Definitions. Imposition of Tax. Exemptions. Rate. Returns and Filing; Due Date. At that cap, the maximum gross earnings tax on gasoline works out to about 24.3 cents per gallon (8.1 percent of $3.00). When wholesale prices sit lower, the tax drops proportionally.
How the Diesel Tax Is Calculated
Diesel does not follow the same structure. Instead of a flat statutory rate, the Commissioner of Revenue Services recalculates diesel every year under a formula in C.G.S. § 12-458h. The rate effective July 1, 2025 through June 30, 2026 is 48.9 cents per gallon, down slightly from 49.2 cents the previous year.3Connecticut State Department of Revenue Services. Announcement AN 2025(2)
The rate has two parts added together. A fixed 29 cents per gallon has been set by statute since July 2011. On top of that, a variable amount is calculated by taking the average wholesale price of diesel (using Oil Price Information Service data for Hartford/Rocky Hill and New Haven over the 12 months ending March 31) and multiplying it by the 8.1 percent petroleum gross earnings tax rate. The two figures are added and rounded to the nearest tenth of a cent.4Justia. Connecticut Code 12-458h – Calculation of Rate of Tax To Be Imposed on the Sale or Use of Diesel Fuel
That design keeps diesel’s tax roughly proportional to the price of the fuel itself: it rises when wholesale prices climb, falls when they drop. There is no separate $3.00 cap for diesel because the gross earnings component is already folded into this single per-gallon number.
The Federal Tax on Top
Every gallon sold in Connecticut also carries a federal excise tax: 18.3 cents on gasoline and 24.3 cents on diesel.5U.S. Energy Information Administration. How Much Tax Do We Pay on a Gallon of Gasoline and on a Gallon of Diesel Fuel? Those rates have not changed since 1993 and are not indexed to inflation. The revenue supports the Highway Trust Fund, which returns money to states for interstate highway maintenance and transit projects. State taxes sit on top of that federal layer, not in place of it.
Alternative Fuels and Electric Vehicles
Vehicles running on compressed natural gas, propane, or liquefied natural gas pay a state excise tax of 26 cents per gasoline gallon equivalent, close to the 25-cent gasoline rate.6Alternative Fuels Data Center. Natural Gas Laws and Incentives in Connecticut
Battery-electric vehicles pay no fuel tax at all because they never stop at a pump. They currently pay a reduced triennial registration fee. A 2026 legislative proposal, HB 5568, would raise EV registration fees significantly to recover some of the lost fuel-tax revenue for the Special Transportation Fund. That bill is still under consideration and has not become law.
Who Can Get a Refund
Connecticut exempts several categories of fuel use from the excise tax or lets purchasers claim refunds afterward. The main qualifying uses are:
- Fuel purchased by the United States government, the State of Connecticut, or any Connecticut municipality is exempt.
- Fuel used in school buses as defined by state law qualifies for a refund.
- Fuel consumed in farm equipment, industrial machinery, and other vehicles not driven on public roads qualifies for a refund.
- Fuel used in boats, including recreational boating over 200 gallons per year, qualifies for a partial refund.
- Fuel used directly in manufacturing qualifies, with Form CERT-100 attached to the claim.
Refund claims are filed on Form AU-724 with the Department of Revenue Services. Each claim must cover at least 200 gallons and must be submitted by May 31 of the year following the purchase, with detailed purchase invoices as supporting documentation.7Connecticut State Department of Revenue Services. Form AU-724 Motor Vehicle Fuels Tax Refund Claim Government buyers can present exemption certificates at the point of sale so they never pay the tax in the first place.
Where the Money Goes
Revenue from both the excise tax and the petroleum gross earnings tax flows into the Special Transportation Fund, a dedicated account walled off from the state’s general budget. State law requires the money to be spent on transportation, starting with debt service on infrastructure bonds and then funding the Department of Transportation, the Department of Motor Vehicles, and related programs. That covers highway construction, bridge repairs, and subsidies for bus and rail service.8Connecticut General Assembly. Special Transportation Fund Transportation Lockbox
In November 2018, Connecticut voters approved a constitutional amendment by an 88-to-12 margin that lifted these protections from ordinary statute into the state constitution.8Connecticut General Assembly. Special Transportation Fund Transportation Lockbox The amendment, often called the “transportation lockbox,” preserves the Special Transportation Fund as a permanent fund, restricts it to transportation uses, and locks in the existing revenue sources so the legislature cannot redirect them to plug general-budget holes. Before the amendment, fuel-tax revenue was periodically vulnerable to raids during budget shortfalls. That door is now closed at the constitutional level.