COLDWATER, MI (WTVB) – Beginning January 1, 2026, Michigan is enacting a significant overhaul of its fuel taxation system, a move designed to direct more money specifically to road and bridge repairs.
The change eliminates the existing 6% sales tax on gasoline and replaces it with a higher, flat per-gallon fuel tax.
The state fuel tax rate will increase from approximately 31 cents to 52.4 cents per gallon, a difference of about 21 cents. However, the net impact on drivers at the pump is expected to be a much smaller increase of around 1.4 cents per gallon, as the sales tax is simultaneously removed.
Key Details of the New Legislation:
-Dedicated Funding: Unlike the previous system where only a small portion of the sales tax went to roads (with most going to schools and general funds), all revenue from the new fuel tax will be deposited into the Michigan Transportation Fund for infrastructure projects.
-Inflation Adjustment: Starting in 2026, the fuel tax will be adjusted annually for inflation, which could lead to gradual rate increases over time.
-Price Point Impact: The effective tax burden for drivers will depend on the price of gas. At a price of roughly $3.50 per gallon, the total tax impact is about the same as the old system. When gas prices fall below this point, drivers will pay slightly more in total taxes, and when prices rise above it, they will pay slightly less.
-EV Fees Increase: Owners of electric and plug-in hybrid vehicles will also see higher annual registration fees to ensure they contribute to road funding, with increases of about $100 for fully electric vehicles and $50 for plug-in hybrids.
Lawmakers say the change will provide a stable, long-term funding source expected to generate an estimated $1.05 billion in the first full year for the state’s long-neglected infrastructure, a key promise of Governor Gretchen Whitmer’s administration. The Michigan Department of Treasury has provided detailed guidance on the changes.
What? Did she promise to “Fix the damn roads” in her 2018 campaign while knowing we didn’t have the money to to that? It took all of these years to admit it wasn’t possible? How do we know she isn’t making more empty promises by raising the newest gas tax increase?
She/They tried to pass other taxes that were put on the ballot. Thank goodness they failed at the polling place. I am old enough to remember when the general sales tax went from 4.25 to 6 percent in order to shore up the school and road budgets.
We still have the worst roads, and despite having one of the highest per student rates, our public schools have failed. Children can’t read, spell, make change for a $20, tell time on an analog clock, and a host of other things.
She/They just need more money. Remember, she/they were elected to run this place, not to represent the citizens. Hope I cleared up the confusion.