State Tax Hikes Set To Raise Energy Costs in 2025
When the clock strikes midnight and the calendar turns to 2025, some Americans will start paying more for gas or other energy needs. Several states are enacting tax hikes that take effect on January 1, causing higher energy costs. Even electric vehicle (E.V.) owners won’t be spared.
California will see significant increases at the gas pump in the coming year. In November, the California Air Resources Board (CARB) amended the Low Carbon Fuel Standard, a state program designed to decrease greenhouse gas emissions from the transportation sector. The agency accelerated carbon dioxide reduction targets, created new credits for zero-emission vehicles, and placed caps on biofuels qualifying for Low Carbon Fuel Standard credits. An assessment from CARB estimated that these changes will increase the cost of gasoline by 47 cents per gallon and the price of diesel by 59 cents per gallon in 2025.
Minnesota will also see higher gas prices, albeit lower than California. In 2025, the state will increase its motor fuel tax on diesel, biodiesel, and gasoline from 28.5 cents per gallon to 31.5 cents per gallon. Ethanol will rise to 22.59 cents per gallon (up from 20.25 cents per gallon) and alternative fuel rates will also increase, according to the Tax Foundation. Revenue generated from these taxes will fund state infrastructure projects.
E.V. owners in Wisconsin and Vermont will also see higher costs in the new year. Starting January 1, Vermont will require drivers of these vehicles to pay an annual E.V. infrastructure fee of $89, in addition to the state’s $89 annual registration fee for all vehicles. Plug-in hybrid owners will be forced to pay $44.50 in addition to the $89 registration surcharge. This ta
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