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- It is the first gas tax increase since 1987 for the Magnolia State. Another 6 cents will be added over the next two years.
Filling up at the pump will cost Mississippi consumers more starting July 1.
As part of House Bill 1, which was passed this legislative session and signed into law by Governor Tate Reeves (R), a 9-cent increase in Mississippi’s fuel excise tax is being phased in over a 3-year period beginning this summer.
The gas tax increase is part of the tax reform package that aims to fully phase out the state income tax while also lowering the sales tax on groceries and adding a new tier to the state employees’ retirement system.
READ MORE: With Governor Reeves’ signature, Mississippi now on track to end the tax on work
The 3-year gas tax phase-in period is as follows:
- 18 cents through June 30, 2025
- 21 cents from July 1, 2025 through June 30, 2026
- 24 cents from July 1, 2026 through June 30, 2027
- 27 cents from July 1, 2027 forward
After July 1, 2029, the gas tax rate will then be adjusted for inflation, rounded to the nearest whole cent with a maximum of 1 cent per gallon increase annually.
Notably, gas taxes on the Mississippi Coast will continue to be higher as Hancock, Harrison and Jackson counties levy an additional 3 cents per gallon tax for what is known as the “Seawall Tax” on the gasoline sold in those counties.
Mississippi’s gas tax has been 18 cents per gallon since 1987.
According to the Tax Foundation, Mississippi’s 18-cent gas tax ranked as the second lowest – 49th – in the U.S. in 2024. Only Alaska was lower at 8.95 cents per gallon. At a rate of 21 cents beginning July 1, Mississippi would fall more in line with neighboring Louisiana, which ranked 43rd at 20.93 cents. California ranked the highest in the nation at 68 cents.
Lawmakers and transportation officials alike have said the state needs more money to maintain and build roads and bridges across Mississippi as material and labor costs continue to rise. They say investment dollars into the state’s critical infrastructure has not kept pace with inflation.
Once fully phased in, estimates show the increase will bring in over $200 million in new funding, allowing the Mississippi Department of Transportation to continue to invest in maintenance and construction projects from the Coast to the Tennessee state line.
As of Friday morning, the national average for a gallon of gas in the U.S. was $3.13, per AAA. Mississippi’s average was the lowest in the nation at $2.65 while California’s average as the highest at $4.65.
News overnight that Isreal has launched strategic strikes against Iran’s nuclear and military facilities sent oil prices up with Brent crude futures and West Texas Intermediate crude futures both surging more than 8 percent, CNBC reported early Friday. WTI crude oil neared $74 a barrel.
Frank Corder
