Indiana gasoline taxes dropping 5 cents a gallon next month

Indiana’s state gasoline taxes will fall by about 5 cents per gallon next month in the first significant drop since reaching record levels in the spring with the national surge in pump prices.

A total of 57 cents per gallon in state taxes will be charged during September under rate changes released Wednesday by the Indiana Department of Revenue.

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.

AAA reported Indiana’s average gas price was nearly $3.95 a gallon as of Wednesday, down from $4.59 a month ago and from $5.15 in mid-June.

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. The Republican-dominated Legislature, instead, earlier this month approved $200-per-taxpayer rebate payments from the state’s surging budget surplus.

The September gas sales tax of 24 cents a gallon is double the rate from early 2021. The road projects tax went up by 1 cent a gallon in July to 33 cents under an automatic increase for inflation allowed under a 2017 plan pushed by Republicans.