Indiana gas tax to increase

SOUTH BEND, Ind. (WNDU) - Thanksgiving travelers take note!

Indiana’s Department of Revenue has served notice that the state’s gasoline-use tax will increase by 1.1 cents per gallon on Nov. 1.

Indiana has two separate state gas taxes, one stays the same from month to month, at 33 cents per gallon. The other changes from month to month, a 7 percent sales tax on whatever the average retail price of gas happens to be.

November will mark the eighth consecutive month that Indiana’s sales tax on gas will top 20 cents a gallon.

Prior to this year, that plateau hadn’t been reached since October 2014.

The sales tax this November will be 23.1 cents. That’s up 5.2 cents from last November, and more than double the 10.7 cent November-tax of two years.

On the other hand, next month’s rate is actually down from a record-setting 29.4 cents in August.

“This summer, we did put a cap on the sales tax or the GUT tax, so it can’t go over 29.5 cents, we thought if the prices got high enough then that’s the consumer protection there at the 29.5, it got close, it got to 29.4, yes,” said Indiana. Sen Ryan Mishler, (R)-Mishawaka.

Democrats had pushed for a temporary suspension of the tax, which has been on autopilot since 2017.

“And so this allows the tax increase without any legislative oversight it just automatically happens,” said Indiana Rep. Maureen Bauer (D)-South Bend. “And there is essentially no accountability back to the lawmaker for that vote.”

The revenue the tax raises used to go entirely to the general fund. By 2025, all proceeds will be dedicated to roads.

“Not every state does charge sales tax on fuel we always have, you know there has been talk—take it away, I don’t think we want to do that because that will reduce the amount of money we have to put in our roads,” Sen. Mishler said.

“So there is no shortage of revenue for those road projects but who it impacts the most are those working families, commuting to work and taking their kids to school and that sort of thing,” Rep. Bauer said.

If you combine the two state taxes on gas with the federal tax on gas, you’re paying a grand total of 74.5 cents worth of taxes for every gallon you buy.

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