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Brief history of road taxes and 9/10ths gas pricing


jdome
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I see a certain thread got canceled before I had a chance to correct someone's erroneous comments. 

The Fed gas tax is 18.4 cents. Ohio tax is 38.5. Other states have fractional taxes although not all are .5.

 

Oregon was the first state to add 1 penny tax to gasoline in 1919, Several other states added similar taxes by 1932 when the Fed first added 1 cent.  The reason for a new tax in the middle of the depression was to finance hi-way related works projects and end the depression by 1934; when the tax was scheduled to expire. Instead of expiring the tax in 34, they raised it to 1.5 cents.  As a protest, to bring public attention, stations posted .5 pricing and after a year of lobbying by the auto & oil industry to eliminate the tax, it was returned to 1 cent.  The fed tax was raised .5 again in 1941 for the war effort and .5 signage appeared again (plus fractional state taxes). This time it was to show patriotism and show stations were not gouging by rounding up. 

 

Gasoline was still a stable commodity in the late 60's early 70's before the embargo years. Price wars were going on at that time and some stations would undercut the competition by posting pre-tax pricing. Honest stations would promote the fractional pricing as a way to let the consumer know the full price, tax included.  9/10 became a permanent fixture on the end of signage since the 70's as a standardized taxation indicator.

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