Currently, highway funding comes from a tax on motor fuel based on a flat rate per gallon. In Texas, it’s 20 cents per gallon for gasoline and diesel. Some policy makers have proposed moving to a tax on motor fuel based on a percentage of the total sales price of the fuel. This strategy would replace the current state tax on motor fuel (a flat rate, such as 20 cents per gallon of gasoline) with a state sales tax on motor fuel (a percentage, such as 5 percent of the average retail price of gasoline).