Paying tax when you fill up your car’s gas tank may seem common now. But in the early 1900s it was far from normal. Oregon became the first state to impose a gas tax on Feb. 25, 1919.
The tax was just one cent and a gallon of gas cost just 25 cents at the time (about 12 cents and $3 in today’s money). Colorado and New Mexico followed Oregon’s lead within six weeks, with most other states right behind. When New York imposed a tax in 1929 it was the final of the 48 states to do so. (Hawaii and Alaska were not yet part of the United States.) In 1932, the federal government instituted its first gas tax of just one cent per gallon.
Cars were relatively newfangled inventions at the turn of the century and states were attempting to accommodate the needs of the horseless carriages, be it newly built highways or networks of paved roads. To fund these projects many states began collecting registration fees and later the gas that drives the vehicles. Oregon created a state highway commission and began a “Get Oregon Out of the Mud” campaign to build new and better roads. The gas tax was designed to get drivers to pay for their new transportation. Projects it funded included the Pacific Highway from the Washington state line to California and the Columbia River Highway.