Why does Maryland's gas tax change every year?

The state's annual gas tax update may still not be enough to keep up with changes in the transportation sector and rising project costs.

1 minute read

June 4, 2026, 5:00 AM PDT

By Diana Ionescu @aworkoffiction


Gas station named Liberty painted with red and white US flag stripes with red cars at gas pump in Bethesda, Maryland.

Gas station in Bethesda, Maryland. | Nicole Glass Photography / Shutterstock

In an article for the Maryland Association of Counties, Kevin Kinnally explains the state of Maryland's gas tax structure, and why the fee changes on an annual basis.

As Kinnally explains, unlike the federal gas tax — which has remained the same since 1993 — Maryland's gas tax is adjusted every year based on a formula established in 2013. The formula ties the tax to inflation, limiting that portion of the increase to 8% per year. "Lawmakers also phased in an equivalent sales and use tax rate on motor fuel. Because wholesale fuel prices fluctuate throughout the year, this portion can rise or fall."

According to Kinnally, the reliance on a gasoline tax is increasingly mismatched with the realities of the transportation sector, which is shifting toward electric vehicles and other gas alternatives. "The annual gas tax adjustment helps transportation revenues keep pace with inflation, but it does not change those underlying trends."

Wednesday, June 3, 2026 in Maryland Association of Counties

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