Kentucky - 18th Highest Gasoline Tax in U.S.

Based on the latest data from the American Petroleum Institute, Kentucky's July 1, 2012 tax increase, to 48.3 cents per gallon, made the state's gasoline the 18th most heavily taxed in the nation.

As a state, Kentucky is one of the largest consumers of gasoline in the nation. Residents of the commonwealth purchase nearly 51,267,000 million barrels of gasoline per year, or the equivalent of almost 1 billion gallons.

That is good news for Frankfort because the recent tax hike on gasoline should earn state government approximately 500 million dollars in revenues.

How does the tax affect the commonwealth consumer? Most people drive nearly 15,000 miles per year and get approximately 20 miles per gallon, which equals 750 gallons of gasoline per year.

To determine annual gasoline cost, multiply the 750 gallons of gas by the price per gallon, for example $3.59, and the total fuel bill for the year equals $2,692.50.

To determine the state excise tax amount, multiply the 750 gallons by  48.3 cents per gallon (to get actual dollar cost, use .483). The result is $362.25. That equals the state excise tax paid for the year, which is included in the total fuel bill.

Of course, there is also the 18.4 cents federal excise tax included in the price of each gallon of gas. The combined federal and state excise taxes are currently 66.7 cents per gallon in Kentucky, which means the total state and federal taxes on 750 gallons of gasoline is $500.25 annually.