Indiana gas sales tax to hit 10-month low

Published: Dec. 27, 2022 at 10:35 AM EST
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(Indiana Capital Chronicle) - Hoosiers will get to ring in the new year with cheaper gas, as Indiana’s gas sales tax drops to the lowest it’s been in nearly a year.

Starting January 1, the monthly tax will be 19.9 cents per gallon, the Indiana Department of Revenue announced this month. That’s down from December’s 23.3-cent rate; the last time the tax was lower was back in March.

The changing tax rate reflects lower gas prices statewide: Hoosiers paid an average of $2.84 per gallon from November 16 to December 15, according to the revenue department. That’s multiplied by the 7% retail rate to obtain a new monthly gas sales tax rate.

Indiana was averaging $2.97 a gallon as of December 22, according to AAA, and below the national average of $3.10.

Hoosiers pay two state taxes on gas: the sales tax (19.9 cents/gallon) and a state excise tax (33 cents/gallon). Both taxes fund state and local road projects.

They also pay a federal excise tax (18.3 cents/gallon) and a second, tiny federal tax funding hazardous waste clean-ups (0.1 cents/gallon).

That adds up to 71 cents of tax on every gallon of gas.

High gas prices pushed Indiana’s gas tax revenue to new heights over the summer.