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PA Diesel Tax increasing in 2023

PA Diesel Tax increasing in 2023

In the Pennsylvania Bulletin for Saturday December 10, 2022, the Department of Revenue noted a 4-cent increase in diesel fuel taxes for 2023.

The tax on fuels (undyed diesel and undyed kerosene) had been $0.741 per gallon since 2018 but will increase to $0.785 per gallon in 2023.

The rate of the oil company franchise tax is determined annually by the Department of Revenue and announced by each December 15 for the following calendar year. The tax rate is determined on a “cents per gallon equivalent basis,” which is defined as the average wholesale price per gallon multiplied by the decimal equivalent of any tax imposed by PA C.S § 9502 (relating to imposition of tax).

According to 75 PA C.S. § 9002, after December 31, 2016, the average wholesale price shall be as determined by the Department of Revenue for the 12-month period ending in September prior to the year for which the rate is to be set. For the 12-month period ending September 30, 2022, the Department has determined that the average wholesale price for all grades of gasoline and diesel fuel was $3.17 per gallon, therefore, the average wholesale price for 2023 is set at $3.17 per gallon – an increase from 2.99 determined for 2018.

Taxes on motor gasoline are also increasing under the same formula from $0.576 per gallon to $0.611 per gallon.

The increase in diesel fuel tax in Pennsylvania, plus the $0.243 per gallon federal tax pushes the total tax per gallon of diesel to $1.028. 

Pennsylvania now has the second highest diesel fuel tax rate in the country, behind only California, which charges $0.795 per gallon.

See the full notice here in the PA Bulletin here:

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