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.
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