We all pay taxes at the pump, but where do they go?

You’re at the pump. Gas is flowing into your vehicle, and the dollar tally is rising.

When you pay the tab, do you wonder how much of that total is actually for gas and how much is taxes? And where do those taxes go? Let’s break it down.

Included in the price of gas are:

• 18.4 cents/gallon federal gas tax, 24.4 cents/gallon diesel tax;
• 26.3 cents/gallon state fuel tax; and
• 6% state sales tax.

But wait! This doesn’t all go to roads.

All sales tax revenue on gas – at $2.50/gallon equals 15 cents – as prescribed by law, goes to fund schools and local governments, including police and fire, and state government.

The federal tax of 18.4 cents goes to the Highway Trust Fund as does the 24.4 cents diesel tax. All that revenue comes back to Michigan for federal-aid eligible roads. By law 25% goes to local roads.

The state gas tax, along with vehicle registration fees, are deposited into the Michigan Transportation Fund (MTF, aka Act 51), which is constitutionally-dedicated to roads. As for the MTF, which currently totals about $2.8 billion a year, multiple deductions are taken off the top for other various transportation programs (transit, rail, debt, etc.), and the balance is divided between MDOT (39.1%), county road agencies (39.1%) and cities and villages (21.8%).

And that’s the summary of gas taxes collected at the pump in Michigan. Send your questions to dearley@micountyroads.org.