Phase One of Gas Tax Increase Begins September 1st

The “Rebuild Alabama Act” signed into law by Governor Kay Ivey earlier this year will begin to take effect next month. Beginning on September first, gasoline and diesel tax will go up $.06 per gallon. Bringing the state’s tax rate to 24 cents per gallon of gas and $.25 per gallon of diesel. The second and third phases of the gas tax increase will go into effect October 1st, 2020 and 2021.

An additional two cents per gallon of gas and diesel tax will be added each year. Then, on October 1st, 2023 and on July 1st of every other year, the gas and diesel tax tax rate will be adjusted by the percentage in the yearly average of the National Highway Construction Cost Index and rounded to the nearest whole cent. The increase of decrease of the tax rate will not exceed one cent per gallon.


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