Indiana Gas Tax
Indiana’s fuel excise tax as of 2022 is $0.33 per gallon. The state also imposes a 7% sales tax per gallon of gas.
Written by Shannon Fitzgerald
Reviewed by Jessica Barrett
As of 2022,
Indiana
’s fuel excise tax is $0.33 per gallon. Indiana also imposes a 7% sales tax on each gallon of gas, as well. Compared to gas tax rates in other states, Indiana falls just about in the middle. That said, it is only one of ten states that applies a sales tax to its fuel costs on top of the excise tax. Because of this, gas taxes can seem pretty steep in the Hoosier State—but exactly how steep?
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How much is the Indiana gas tax?
In Indiana, you will be charged a fuel excise tax of $0.33 per gallon along with a 7%
sales tax
per gallon each time you fill up in 2022. This excise tax has been increasing over the years to keep up with inflation—with the current rate already 10 cents higher than it was in 2017. Indiana is one of only 10 states in the country that applies a sales tax to its gasoline. This 7% sales tax is calculated monthly from a total of multiple factors, including the retail price of gas, the fuel excise tax, and the $0.0184 federal gas tax.
As a combined result of inflation and record high gaps between demand and supply for crude oil (causing sharp cost increases), Indiana’s sales gas tax costs have almost tripled since 2021.
Is gas tax relief on the way in Indiana?
In early summer, President Biden proposed both state and federal governments suspend gas taxes to provide temporary relief to American drivers from skyrocketing fuel costs. While Biden’s “tax holiday” proposal was ultimately quashed in Congress, can Indiana drivers expect any relief from gas taxes on a state level?
The jury’s still out on that. Despite Governor Eric Holcomb agreeing that Indiana drivers are in need of inflation relief, he has so far favored distributing $225 to residents (later lowered to $200) rather than adjusting the fuel excise tax. In fact, Indiana’s fuel excise tax has actually increased since Biden’s “tax holiday” suggestion—going up by 1 cent from June to July under an automatic inflation adjustment plan the state legislature passed in 2017.
On a positive note, taxpayers in Indiana have already received $125 in direct gas tax relief payments, and the $200 tax rebate has been approved to hit Indiana drivers’ bank accounts between Oct. 1 and Oct. 31. Calls to temporarily freeze the Indiana fuel excise tax or even revert to June’s $0.032 rate, however, have so far been denied in fear that the state would lose too much infrastructure revenue.
How high are gas prices in Indiana?
In terms of gas prices as a whole, Indiana falls on the higher end of the spectrum at an average of $3.976 per gallon according to
AAA
(as of late September 2022). While this isn’t as heart-stopping as California’s $6.036 per gallon average, it’s still above the national average of $3.765 per gallon. Of course, gas prices across Indiana aren’t uniform either. Generally, the southernmost counties of the state enjoy the lowest prices at the pump while northwestern counties suffer from higher gas prices.
As you might expect, higher demand in more populated areas leads to higher fuel costs. However, areas that are required to use cleaner reformulated gasoline due to high smog levels will also have more expensive gas prices.
Such is the case for Lakeshore hot spot, Michigan City, whose gas prices currently top the state out at $4.102 per gallon. Even though Evansville is more populated than Michigan City, it’s not required to use reformulated gasoline, so its drivers only pay an average of $3.424 a gallon.
That said, Evansville
car insurance
costs are still higher than Michigan City insurance costs because there are more drivers on the road. Since Indiana’s average metro gas prices can be tricky to predict, here’s an idea of what gas prices look like in some of Indiana’s largest cities as of September 2022 (according to AAA):
- Indianapolis: $4.044 per gallon (vs. $3.104 in September 2021)
- Fort Wayne: $4.049 per gallon (vs. $3.123 in September 2021)
- Evansville: $3.424 per gallon (vs. $2.942 in September 2021)
- South Bend: $4.031 per gallon (vs. $3.065 in September 2021)
- Bloomington: $4.075 per gallon (vs. $3.215 in September 2021)
- Lafayette: $4.048 per gallon (vs. $3.038 in September 2021)
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Which state has the highest gas tax?
Based on excise gas taxes alone, Indiana doesn’t have the highest gas tax in the country. Instead, Pennsylvania takes the cake, with California and Washington following close behind. Here’s a run-through of fuel excise taxes in each state as of 2022 to help you compare.
State | Gas tax |
|---|---|
Alabama | $0.28 per gallon |
Alaska | $0.0895 per gallon |
Arizona | $0.18 per gallon |
Arkansas | $0.245 per gallon |
California | $0.539 per gallon |
Colorado | $0.22 per gallon |
Connecticut | $0.0 per gallon |
Delaware | $0.23 per gallon |
District of Columbia | $0.235 per gallon |
Florida | $0.33 per gallon |
Georgia | $0.0 per gallon |
Hawaii | $0.16 per gallon |
Idaho | $0.32 per gallon |
Illinois | $0.392 per gallon |
Indiana | $0.33 per gallon |
Iowa | $0.24 to $0.305 per gallon |
Kansas | $0.240 per gallon |
Kentucky | $0.246 per gallon |
Louisiana | $0.20 per gallon |
Maine | $0.30 per gallon |
Maryland | $0.427 per gallon |
Massachusetts | $0.24 per gallon |
Michigan | $0.272 per gallon |
Minnesota | $0.285 per gallon |
Mississippi | $0.18 per gallon |
Missouri | $0.22 per gallon |
Montana | $0.33 per gallon |
Nebraska | $0.248 per gallon |
Nevada | $0.23 per gallon |
New Hampshire | $0.222 per gallon |
New Jersey | $0.421 per gallon |
New Mexico | $0.17 per gallon |
New York | $0.1735 per gallon |
North Carolina | $0.385 per gallon |
North Dakota | $0.230 per gallon |
Ohio | $0.385 per gallon |
Oklahoma | $0.19 per gallon |
Oregon | $0.38 per gallon |
Pennsylvania | $0.576 per gallon |
Rhode Island | $0.34 per gallon |
South Carolina | $0.28 per gallon |
South Dakota | $0.28 per gallon |
Tennessee | $0.26 per gallon |
Texas | $0.20 per gallon |
Utah | $0.319 per gallon |
Vermont | $0.316 per gallon |
Virginia | $0.28 per gallon |
Washington | $0.494 per gallon |
West Virginia | $0.357 per gallon |
Wisconsin | $0.309 per gallon |
Wyoming | $0.24 per gallon |
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Idling less, optimizing cruise control, and keeping a
basic car maintenance routine
are all ways to help you lower your fuel costs in Indiana—even without a suspended fuel excise tax.Of course, there are other expense factors to car ownership that can get you down, too.
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