New Jersey's gas tax must raise a set dollar amount each year, and the state determines the per-gallon rate to hit it. By Nov. 15, state officials must count what the tax raised in the budget year that ended June 30. Any new rate starts Jan. 1.
Whether New Jersey's gas tax changes on Jan. 1, 2027, depends on how much fuel drivers buy against a dollar target in state law, not on what they pay per gallon.
The state charges a fixed number of cents on gasoline, 49.1 cents per gallon since Jan. 1, 2026. That rate has not changed all year, even as pump prices have: AAA put the statewide average for regular at $2.81 on Jan. 5 and $4.06 on Nov. 8.
By Nov. 15, the state treasurer and the Legislature's budget officer must determine how much the fuel taxes brought in. The treasurer then consults the budget officer and sets the rate. This year's decision belongs to State Treasurer Aaron Binder.
The law sets no deadline for announcing the new rate, only that it takes effect Jan. 1. The New Jersey Department of Treasury announced the last two results on Dec. 2, 2024, and Dec. 1, 2025. Any change this time takes effect Jan. 1, 2027.
Two state taxes on each gallon pay for roads and bridges
The 49.1 cents on a gallon of gasoline is two state taxes added together, according to Treasury. One, the motor fuels tax, stays fixed at 10.5 cents a gallon. The other, a tax on fuel companies' sales that the state converts to cents per gallon, can change once a year and stands at 38.6 cents this year.
Drivers also pay 18.4 cents a gallon in federal taxes and fees at the pump, according to the U.S. Energy Information Administration.
A 2016 amendment to the state Constitution requires every dollar from both state taxes to go to transportation, according to the New Jersey Transportation Trust Fund Authority. The money lands in the state Transportation Trust Fund, which pays for building transportation projects and paying off transportation bonds, a state Assembly committee wrote in March 2024. Treasury said in December 2025 that the fund's current five-year program puts nearly $11 billion into roads and bridges.
A dollar target in state law sets the rate each year
A 2016 state law created the yearly gas tax review. A 2024 law kept it and replaced the 2016 law's fixed target with one that rises every year, from $2.032 billion for the budget year that ended June 30, 2025, to $2.366 billion for the year that ends June 30, 2029. The state's budget year runs from July 1 to June 30.
For the current budget year, which ends June 30, 2027, the target is $2.199 billion. The 2024 law also moved the end of the yearly count from Aug. 15 to Nov. 15 and the rate change from Oct. 1 to Jan. 1.
Each fall, the treasurer and the Legislature's budget officer add up what the two taxes brought in during the budget year that ended June 30 and compare it with that year's target. The law adds a shortfall to the current year's target and takes a surplus off it.
Treasury then estimates how many gallons drivers will buy in the current budget year, which runs through the next June 30, and sets the per-gallon rate starting Jan. 1 so the year's revenue reaches the target.
Fewer gallons, or a bigger target, means more tax on each gallon. More gallons, or a surplus, means less.
In the fall of 2025, Treasury started from a $2.115 billion target for the budget year that ended June 30, 2026. The year before had come up $23.8 million short, which raised the amount to collect to $2.139 billion.
Treasury reviewed fuel sales data and projected that drivers would buy 1.0 percent less fuel in that budget year than the year before. A bigger target spread over fewer gallons meant a higher rate: Treasury raised it 4.2 cents on Jan. 1, 2026.
The 2016 law's target started from what the two taxes raised in the 2016 budget year, $1.948 billion, when fuel sales peaked because of what Treasury's Office of Revenue and Economic Analysis called "exceptionally low prices." Sales stayed below that peak. The office pointed in 2021 to better fuel efficiency and electric vehicles, and Treasury added remote work in 2023.
The biggest moves since the yearly reviews began came under that law, during the pandemic.
In the budget year that ended June 30, 2020, revenue from the fuel taxes came in $154 million below the target because of the pandemic, Treasury's revenue office wrote in 2021. The office projected that drivers would buy 20.2 percent less fuel in the 2021 budget year than in the 2016 budget year. The rate rose 9.3 cents on Oct. 1, 2020.
A year later, revenue had run 2.8 percent over the target, while the office projected sales for the 2022 budget year at 14.3 percent below the 2016 level. The rate fell 8.3 cents on Oct. 1, 2021.
That rate cut was still in place on June 13, 2022, when New Jersey drivers paid a record of more than $5 a gallon for regular, according to AAA. Despite the high price at the pump, the state tax on each gallon was lower than it had been a year before.
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Sources
AAA, "AAA Fuel Prices," New Jersey average gas prices (accessed Nov. 8, 2026)
New Jersey Department of the Treasury, Division of Taxation, "Rates for the Petroleum Products Gross Receipts Tax" (accessed Nov. 8, 2026)
New Jersey Department of the Treasury, Office of Revenue and Economic Analysis, "OREA Explains: The 'Gas Tax,'" Issue No. 3, Volume 1 (August 2021)
New Jersey Department of the Treasury, press release, "Aaron Binder Sworn In as New Jersey State Treasurer" (March 4, 2026)
New Jersey Department of the Treasury, press release, "Treasury Announces Change in Gas Tax Rate Effective October 1" (Sept. 1, 2023)
New Jersey Department of the Treasury, press release, "Treasury Announces Gas Tax Rate Will Increase by 2.6 Cents Effective January 1, 2025" (Dec. 2, 2024)
New Jersey Department of the Treasury, press release, "Treasury Announces Gas Tax Rate Will Increase by 4.2 Cents Effective January 1, 2026" (Dec. 1, 2025)
New Jersey Legislature, Assembly Transportation and Independent Authorities Committee, "Statement to Assembly, No. 4011," 221st Legislature (March 7, 2024)
New Jersey Legislature, Office of Legislative Services, "Legislative Fiscal Estimate, Assembly, No. 4011," 221st Legislature (March 19, 2024)
New Jersey Legislature, P.L.2024, c.7, "An Act concerning the financing and construction of transportation infrastructure in the State, revising various parts of the statutory law, and supplementing Title 39 of the Revised Statutes" (March 26, 2024)
New Jersey Transportation Trust Fund Authority, "Appropriation Revenues" (accessed Nov. 8, 2026)
U.S. Energy Information Administration, "How much tax do we pay on a gallon of gasoline and on a gallon of diesel fuel?" (accessed Nov. 8, 2026)
Young, Jillian, AAA Northeast, Newsroom, "Average Gas Prices Decline Across the Northeast as Inventories Swell" (Jan. 5, 2026)
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