Leslie Bonilla Muniz
Indiana Capital Chronicle
INDIANAPOLIS — 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.
The Indiana Capital Chronicle is an independent, nonprofit news organization dedicated to giving Hoosiers a comprehensive look inside state government, policy and elections. The site combines daily coverage with in-depth scrutiny, political awareness and insightful commentary.
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