Internal Revenue Service United States Department of the Treasury
Theme 5: Impact of TaxesLesson 1: How Taxes Influence Behavior

 

Activity 2: The Gasoline Tax
Cost of Gasoline
State Real Cost of Gasoline State Excise Tax Additional Tax Federal Excise Tax
Oklahoma $2.71/gallon 17 cents/gallon 1 cent/gallon (environmental fee) 18.4 cents/gallon
Idaho $2.65/gallon 25 cents/gallon 1 cent/gallon (clean water tax) 18.4 cents/gallon
W. Virginia $2.64/gallon 27 cents/gallon 6.5 cents/gallon (sales tax) 18.4 cents/gallon
Florida $2.67/gallon 14.9 cents/gallon 14.5 cents/gallon (sales tax) 18.4 cents/gallon

The price you pay for a gallon of gas includes state and federal taxes, as well as environmental fees and other fees. These taxes and fees can vary from state to state.

Imagine that you run a lawn-mowing service. You need at least five gallons of gas for each job you do. In this activity, you will calculate how much money you need to spend on gas for one job in each of these four states: Oklahoma, Idaho, West Virginia, and Florida.

The table above shows the cost of gasoline in each of the four states plus any taxes and fees. Because the cost of gasoline changes daily, assume that the price listed is the "real" cost of gasoline.

Calculate how much money you would need for five gallons of gas in each state. Use the drop-down menus to match each dollar amount to the correct state. To assess your answers, click the Check My Answers button at the bottom of the page.

 

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