Indiana’s Gas Tax Will Be Slightly Lower in June but Still Among the Highest Ever

DjelicS / iStock.com

Indiana residents will pay slightly less in gasoline taxes next month, but don’t expect them to break out the party hats. Overall gas taxes will only nudge down 0.1 cents — to 74.4 cents a gallon in June from a record high of 74.5 cents in May.

See: Stimulus Updates To Know for Spring 2022
Find: 10 Dollar Store Items That Aren’t Even Worth the Buck

The Indiana Department of Revenue last week announced that the state’s gasoline sales tax rate — which makes up only part of overall taxes tied to gas — will be 24 cents a gallon in June 2022, according to the Times of Northwest Indiana. That represents a 0.4% decrease from May 2022 but is up 50% from June 2021.

Indiana is one of only 16 states that impose a sales tax on gasoline purchases. In the Hoosier state, that rate is 7%.

Gas taxes don’t end there, however. As GOBankingRates previously reported, Indiana also imposes a separate gasoline tax of 32 cents a gallon — up from 18 cents less than five years ago. In addition, motorists pay a federal gasoline tax of 18.4 cents a gallon.

POLL: Have Gas Prices Affected Your Driving Habits?

One result is that Hoosiers pay among the highest gas taxes in the nation. A recent report from Kiplinger rated Indiana No. 6 among the states with the highest gas taxes, behind only California (No. 1), Illinois, Pennsylvania, Hawaii and Nevada. Each of those states has much higher overall costs of living than Indiana.

Gasoline taxes in Indiana are tied to the wholesale price of gasoline, which has surged this year mainly due to the oil market impact of Russia’s invasion of Ukraine. Because there is no cap on Indiana’s gasoline sales tax rate, it goes up when wholesale gas prices go up.

Some Indiana lawmakers have proposed that Gov. Eric Holcomb convene a special session of the General Assembly to temporarily suspend collection of the state’s gasoline tax and sales tax on gasoline. Doing so would immediately cut prices at the pump by 56 cents a gallon, the Times of Indiana reported.

“The temporary suspension of these exorbitant gas taxes will lead to Hoosiers finally being able to travel again without worries of how they will pay their bills or feed their families,” state Rep. Vernon Smith (D-Gary) said in a statement.

But so far Holcomb and other legislative leaders have not tipped their hands about whether such a move is under consideration.

More From GOBankingRates