California Implements Gas Tax Increase and New State Laws
Tax hike adds 1.6 cents per gallon as part of July 1 legislative changes
California implemented several new laws on July 1, 2025, including an increase in the state gas tax. The California Department of Tax and Fee Administration raised the gas tax from 59.6 cents to 61.2 cents per gallon for regular gasoline, representing a 1.6 cent increase. Diesel fuel taxes also increased from 45.4 cents to 46.6 cents per gallon. These changes contribute to Californians now paying approximately 90 cents per gallon in combined taxes and fees.
The timing of the tax increase coincides with fluctuating oil prices, which may affect how consumers experience the price changes at the pump. According to Gas Buddy analyst Patrick De Haan, recent decreases in oil prices of over $10 per barrel could potentially offset some of the immediate impact of the tax increase. The average gas price in California during the Fourth of July weekend stands at $4.59 per gallon, reflecting the state's consistently higher fuel costs compared to national averages.
KEY POINTS
- •Gas tax rises 1.6 cents per gallon
- •New worker and consumer protections
- •Subscription cancellation rules updated
Beyond fuel taxes, several other significant laws took effect in California on July 1. Healthcare workers will now receive wage increases, with some positions earning up to $24 per hour. Short-term rental property owners must now disclose cleaning tasks to guests to avoid penalty fees. Consumer protection measures include new requirements for subscription services to provide notification before automatic renewals occur.
Additional consumer and worker protection laws were also implemented. Restaurants must now provide lids for alcoholic beverages upon customer request, a measure designed to prevent drink spiking. Another new law establishes safety protections specifically for household domestic workers. These various legislative changes reflect California's ongoing efforts to address consumer rights, worker protections, and revenue generation through its tax structure.
The gas tax increase represents a continuation of California's approach to transportation funding and environmental policy. Changes to the state's low-carbon fuel standard are also expected to impact gas prices, though the timing and extent remain uncertain. California's fuel taxes remain among the highest in the nation, contributing to the state's transportation infrastructure funding and environmental initiatives.