Gas Tax

Hoosiers will pay more at the pump this month as the gas use tax increases to 20.4 cents.

The Indiana General Assembly slipped a three-year extension of an annual 1-cent tax hike into the state budget this year, but it’s a stopgap during the hunt for a longer-term solution.

An Indiana agency confirmed Tuesday that the state’s gasoline tax will go up by one cent this summer under an annual increase that Republican legislators voted recently to extend by three years.

Indiana’s state gasoline taxes will drop by about 3 cents per gallon next month to their lowest level since April.

That tax rate will be 5.4 cents less than August’s record-high rate of 62.4 cents, a fluctuation that comes as Indiana’s 7% sales tax on gasoline is calculated monthly along with a set tax directed to road projects.

SB 3 (ss), would suspend the 7 percent sales tax that you pay on your utility bills for six months – electricity, water, gas, internet and phone. It also caps, through June 2023, the state sales tax on gasoline.

Republican Gov. Eric Holcomb and GOP legislative leaders have rejected calls from Democrats since March to temporarily suspend state gas taxes to aid residents amid the high national inflation rate.

Indiana’s sales tax on gasoline will actually rise slightly starting Aug. 1 even though pump prices have dropped more than 11% from a month ago.

President Biden is calling on congress to suspend the federal gas tax. He encourages state leaders to provide aid as well.

The state’s residents will pay 62 cents per gallon in taxes on gasoline, the state Department of Revenue announced Monday.