As you travel around the U.S. this summer, prepare to pay more for everything from gas to bourbon. Faced with budget deficits, a sharp drop in federal funds and outdated infrastructure, states are hiking sales and excise taxes — in some cases, for the first time in years.
Motorists will be hard-hit. This year, Wyoming raised its gas tax to 24 cents from 14 cents per gallon. California’s excise tax on gas rose 3.5 cents, to 39.5 cents a gallon. Vermont raised its gas tax by nearly 6 cents, to about 32 cents per gallon.
If you enjoy a drink with dinner, sin taxes could also squeeze your budget. Last year, Washington State privatized liquor sales — a move that usually results in lower prices — but coupled it with a tax increase on distilled spirits of up to $35.22 per gallon. The tax hike, paid by commercial establishments but passed along to customers, has increased the price of drinks purchased in bars and restaurants, along with bottles bought in a store, says Scott Drenkard, an economist with the Tax Foundation.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Smokers may want to quit. In 2012, Illinois more than doubled its excise tax on cigarettes to $1.98 per pack. That levy, combined with Chicago’s local tax, adds $4.66 to the price per pack. In New York City, state and local cigarette taxes add $5.85 to the price of a pack. “Cigarettes cost around $11 a pack in New York,” Drenkard says. “That surprises people.”
Taxes on hotels and rental cars are popular with state lawmakers because they’re typically paid by nonresidents who can’t vote against them. Virginia’s recently enacted transportation funding bill added a 3% hotel tax to existing tax rates for hotels in Northern Virginia.
-
The 28% Rule for Housing: Does It Still Work in Today’s Market?Rising home prices and stubborn mortgage rates put this long-standing rule to the test.
-
Spirit Airlines' Future in Doubt: What This Means for Budget TravelSpirit Airlines says it may not survive another year. Here's how its potential collapse could affect low-cost flights and what it means for travelers seeking affordable airfare.
-
How to Find the Best Alternatives to Popular Travel DestinationsYou don’t have to bust your budget or battle big crowds to enjoy pristine natural beauty, rich culture, authentic cuisine and more.
-
Seven Golf Course Destinations to Vacation Away from the CrowdsBeat the growing crowds of new golfers at these golf course destinations off the beaten path.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
Hawaii Approves First-of-its-Kind 'Green Fee' for Tourists: What to KnowState Tax Your trip to the Aloha State could be a bit more expensive next year. Here's why
-
The United and JetBlue Partnership: Everything We Know About Blue Sky So FarDOT approves Blue Sky, the United and JetBlue partnership that will give frequent fliers more ways to earn and use miles. Here's what you need to know.
-
Struggling with How to Plan a Trip? These Companies Will HelpTravel Plans Sit back, relax and let the professionals handle the logistics.
-
NYC Congestion Pricing: 'Ghost Tax' or Necessary Fee?State Tax Despite legal hurdles, drivers headed to Manhattan’s downtown district face a new toll as of January 5th.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
