California to increase diesel fuel tax again

California is increasing its International Fuel Tax Agreement (IFTA) for the second time this year.

On October 1, California’s diesel tax will increase to $1,089. The increase will be valid until June 30, 2024. Every year on July 1, the Sunshine State adjusts its fuel tax rate.

The first tax increase this year occurred on July 1. Then the tax increased from 85.3 cents to 89.3 cents.

Those who owe IFTA taxes should begin using the updated rates on their third-quarter 2023 returns, according to the California Department of Taxation and Fee Administration.

The state tax rate includes both a diesel fuel tax and an excise tax. The increase applies to diesel fuel purchased outside of California and used within the state.

Earlier this year, Gov. Gavin Newsom signed legislation imposing price gouging rules on oil companies. This law came into force on June 26.