New MI Gas Tax Takes Effect Jan. 1: What To Know

Michiganders may see higher prices at the pump in 2026, thanks to a new gas tax.

Starting Jan. 1, there will no longer be a 6 percent sales tax on gasoline and diesel fuel. Instead, state officials opted to increase Michigan's fuel tax rate from 31 cents per gallon to 52 cents per gallon.

State officials said the 21 cent increase will help fund road and bridge projects across Michigan.

Despite the increase, GasBuddy's Patrick De Haan told Fox 2 Detroit drivers shouldn't see too much of a difference.

"I hear a lot about this 20-cent increase," he told the news station. "A lot of people are concentrating on that without taking into consideration that there’s going to be an elimination of the sales tax on gasoline. So that’s the good news. It’s not going to be a huge hit. It’s going to be a slight hit."

As of Wednesday, the average price for a gallon of gas across Michigan was $2.75, down nine cents from last week and 21 cents from last month, according to AAA.

The new gas tax is just one of multiple new laws that will take effect in Michigan starting Jan. 1. Other new laws include a new marijuana tax and the "Taylor Swift" bills.

• Related — 10 New MI Laws That Will Change Your Life In 2026