California’s excise tax on motor vehicle fuel and diesel rises every July 1, adjusted for inflation under state law. On July 1, 2026, gasoline moves from 61.2 cents to 63.4 cents per gallon, and diesel from 46.6 cents to 48.2 cents per gallon. For service-station operators and fuel retailers across the La Crescenta–Glendale corridor — and throughout LA County — these figures flow directly into your prepayment obligations and cost basis starting with the first fuel delivery after July 1.

The new excise tax rates, side by side

CDTFA Special Notice L-1025 (June 2026) sets the following excise rates effective July 1, 2026 through June 30, 2027:

These are excise taxes, entirely separate from sales-and-use tax. You report and remit both, but they’re calculated differently and land on different lines of your CDTFA return.

Prepayments: what you owe before the return is filed

Fuel retailers subject to the sales-and-use tax prepayment program pay tax upfront on each gallon sold — before the return is filed. For 2026–27, the CDTFA has set prepayment rates at 8.0 cents per gallon for gasoline (representing a 2.25% rate) and 42.5 cents per gallon for diesel (13.00%). These are calculated at 80% of the combined state and local sales tax on the average selling price of fuel, based on figures reported by industry publications. The CDTFA can adjust the prepayment rates during the year if fuel prices move enough to create significant overpayment or underpayment.

One thing that doesn’t change: you still owe district taxes on top of the state rate. If your station is in Glendale, unincorporated LA County, or another jurisdiction with its own sales-tax add-on, those rates layer on top. An up-to-date district rate table is at cdtfa.ca.gov/formspubs/cdtfa105.pdf. For a broader picture of which agencies collect what in the La Crescenta and Glendale area, see our local tax & license map.

Why this happens every July

Revenue and Taxation Code section 7360(d) requires the CDTFA to adjust motor vehicle fuel, diesel, and aviation gas excise rates each July 1 based on the percentage change in the California Consumer Price Index. This is not a new rule. California voters locked in the CPI-linked mechanism when they rejected Proposition 6 in 2018, which would have repealed it. The revenue flows into the State Highway Account and the Road Maintenance and Rehabilitation Account to fund road maintenance, bridge safety, and congestion relief statewide. As of this writing, global oil supply disruptions have also contributed to higher selling prices, which feeds into how the CDTFA sets the sales-and-use tax prepayment rates.

What this means for you

For most service-station operators, July 1 is a bookkeeping update, not a cash-flow shock — the excise rate moves by cents per gallon, not dollars. But your accounting software, point-of-sale records, and CDTFA filings all need to reflect the new figures from the moment the new rate period begins. Getting the rate wrong by even one period creates the kind of discrepancy that surfaces on a CDTFA audit. Update before your first fuel delivery in July, and confirm that your district add-on hasn’t changed since you last checked.

Before July 1

  • Update excise tax rates in your accounting software and POS system to the July 1, 2026 figures (gasoline 63.4¢, diesel 48.2¢)
  • Verify your district sales-tax add-on at cdtfa.ca.gov/formspubs/cdtfa105.pdf
  • Confirm with your bookkeeper that prepayment calculations use the new rates starting with July deliveries
  • Save CDTFA Special Notice L-1025 (June 2026) for your records — it’s the authoritative source for this rate change
  • Questions on how these rates appear on your return? Call the CDTFA Customer Service Center at 1-800-400-7115 (Mon–Fri, 7:30 a.m.–5:00 p.m. Pacific)
Sources & further reading

This article is general information, not tax advice for your specific situation. Rules change and details matter — talk to a CPA (we know one) before acting on anything here.