Indiana gas tax set to increase one cent on July 1

Total tax per gallon sits at 71.7 cents for May

Indiana’s state gasoline tax is set to go up by one cent this summer, under an annual increase that state legislators recently extended by three years until 2027. The tax will increase on July 1 to 34 cents per gallon.

The increase has happened every July since 2017 when legislators increased the tax from 18 cents to 28 cents. That plan was set to expire in 2024, but it was extended in the state budget bill that was passed this year by the Republican state legislature and signed by Gov. Eric Holcomb.

Indiana’s gas tax also includes a 7 percent sales tax. According the Indiana Department of Revenue, the gasoline use tax (defined as the retail price per gallon multiplied by the 7 percent sales tax) stands at 20.3 cents for the period of May 1 to May 31.

Adding the current per-gallon tax of 33 cents, that means motorists are paying 53.3 cents per gallon in taxes to the state, plus another 18.4 cents per gallon in federal taxes, for a total of 71.7 cents per gallon in taxes.

That puts Indiana at 14th in the nation for the highest gas taxes.

Road projects and other infrastructure needs are the main use for the gas tax.

Note: Diesel taxes are significantly higher. Indiana levies the 7 percent sales tax plus 55 cents per gallon. The federal government’s tax amounts to 24.4 cents per gallon.