By JONATHON PORTER

WASHINGTON, D.C. – Rising fuel prices continue to drive renewed interest in suspending the federal gas tax, but the conversation is now expanding beyond Washington as several states take action and others consider similar measures.

Suspending the gas tax, whether at the federal or state level, does not address the underlying causes of higher fuel prices. It also creates challenges for transportation funding. At the federal level, the gas tax is the primary source of revenue for the Highway Trust Fund, which supports investments in roads, bridges, and transit systems. Reducing or suspending that revenue makes it more difficult to maintain consistent funding for infrastructure projects without relying on alternative sources such as general fund transfers.

There is also no guarantee that the savings from a gas tax suspension would be fully passed along to consumers. Market dynamics, including refinery capacity, distribution costs and global oil prices, ultimately play a much larger role in determining what drivers pay at the pump.

At the federal level, proposals to suspend the 18.4-cent-per-gallon gas tax remain under discussion, with lawmakers pointing to geopolitical tensions and rising oil prices as justification for temporary relief. As previously reported, these proposals come as Congress begins work on the next surface transportation reauthorization bill, raising broader questions about how to fund long-term infrastructure investment.

At the same time, a growing number of states are moving ahead with their own fuel tax holidays or reductions.

Georgia enacted a temporary suspension of its motor fuel excise tax from March 20 through May 19, while Indiana implemented a 30-day suspension of its gasoline sales tax in April. Utah has taken a longer-term approach, reducing its gas tax by 15 percent for the second half of 2026. Additional proposals have been introduced in states like Alabama, Arizona, and South Carolina, while discussions are ongoing in Connecticut, Florida, Maryland, New York, and Pennsylvania.

Many in Congress have brushed these proposals off in the past. Former Speaker Nancy Pelosi called it “showbiz” and former President Obama and Senate Minority Leader Mitch McConnell called this idea a “gimmick.” Florida Gov. Ron DeSantis, who signed a state gas tax holiday into law in 2022, reflected on it recently saying, “I don’t think the consumer really felt relief.”

AGC will continue to monitor both federal and state developments and keep members informed as the debate evolves.