Tennessee Gas Tax

Tennessee’s gasoline tax is a per-gallon excise of 26.0¢, plus a 1¢ special privilege tax and a 0.4¢ environmental assurance fee. Gasoline is not subject to the state sales tax, and none of the charges is indexed. All three are fixed per-gallon amounts, so the tax on a gallon is the same whether gasoline costs $2 or $5.

The excise was set by the IMPROVE Act, Public Chapter 181, passed in April 2017. It raised the rate from 20¢ in three steps: to 24¢ on July 1, 2017, 25¢ on July 1, 2018, and 26¢ on July 1, 2019. The same law cut other state taxes, including the sales tax on groceries. There has been no change to the gasoline rate since the July 2019 step.

In the EIA’s July 2026 (revised August 2026) table, Tennessee’s state taxes and fees total 27.4¢ a gallon, the 19th-lowest of the 50 states and D.C., against a 51-jurisdiction average of 33.8¢. How pump prices there compare with neighboring states is on the Tennessee gas prices page.

Tennessee touches eight states, as many as any state in the country, and its 27.4¢ a gallon is below five of them. Virginia (42.4¢) and North Carolina (41.3¢) are the highest, followed by Georgia (34.1¢), Alabama (31.0¢) and Missouri (30.0¢). Kentucky (26.4¢), Arkansas (25.0¢) and Mississippi (24.4¢) charge less.

The widest of those differences is at Bristol, where State Street is the Tennessee–Virginia line and the two halves of the city sit under different state rates. At Memphis the pattern is reversed: the Arkansas and Mississippi suburbs across the river and the state line have lower state tax than the city itself. Four of the eight neighbors, Alabama, Georgia, Mississippi and Missouri, are flagged by the EIA for local option fuel taxes that sit outside these figures; Tennessee is not.

Of Tennessee’s total, 26.0¢ is the excise and 1.4¢ is the special privilege tax and environmental assurance fee combined. The federal 18.4¢ raises the combined rate to 45.8¢, of which Tennessee’s share is a little under three-fifths. Against the average state tax of 33.8¢, the state is lower, the 19th-lowest of 51.

In the EIA's July 2026 table, Tennessee's 27.4¢ state total is 15.0¢ below Virginia's 42.4¢ and 13.9¢ below North Carolina's 41.3¢. It is 6.7¢ (EIA table, July 2026) below Georgia's 34.1¢, 3.6¢ below Alabama's 31.0¢ and 2.6¢ below Missouri's 30.0¢.

On the other side of the ledger, Tennessee's state total is 1.0¢ above Kentucky's 26.4¢, 2.4¢ above Arkansas's 25.0¢ and 3.0¢ above Mississippi's 24.4¢ in the same July 2026 table. Mississippi has the lowest state total among the bordering states, and Virginia, at 42.4¢ (EIA table, July 2026), has the highest.

Across the whole table, state totals run from Alaska's 9.0¢ (EIA table, July 2026) to California's 73.6¢, with 32 jurisdictions above Tennessee and 18 below it. Tennessee sits 6.4¢ below the 33.8¢ average for the 50 states and D.C. in the EIA's July 2026 table.

Excise is 95% of Tennessee's state total in the EIA's July 2026 table. Adding the 18.4¢ (EIA table, July 2026) federal tax gives 45.8¢, and the state's part of that combined figure is 60%. No local option gasoline tax appears for Tennessee in the July 2026 table, which leaves county and local taxes out of its state figures.