Gov. Mike Braun announced the continued suspension of Indiana’s gasoline usage and excise taxes on Thursday, just ahead of the Labor Day weekend. This action extends his latest energy emergency order, which helps Hoosier motorists avoid an immediate increase in gasoline prices.
Without this renewal, residents would have paid an additional 61 cents per gallon in excise and usage taxes starting September 5. Instead, Indiana drivers are expected to see some of the lowest gasoline prices in the nation as they travel for the holiday weekend. On Thursday, the average cost for a gallon of regular unleaded gasoline in Indiana was $3.45, significantly below the national average of $4.14 per gallon, according to AAA.
Gov. Braun stated that "Affordability has been a top priority," adding that his gas tax suspensions have delivered the least expensive gas in America for Hoosier families.
Hoosiers have not paid the state's gasoline use tax, a 7% sales tax calculated monthly, since the governor declared an energy emergency in April at the start of the Iran War. The 37-cent excise tax was also suspended when Braun renewed the emergency order the following month, meaning both taxes have been suspended since May.
In August, Braun issued a new energy emergency, citing the 2022 Russian invasion of Ukraine and recent Canadian wildfires as reasons to continue the suspension beyond the 120 days legally permitted for the governor to act without legislative approval. Thursday's renewal ensures that both the excise and usage taxes will remain suspended through at least October 6.
While lawmakers are set to return for their budget-writing session in January, they have shown little interest in calling a special legislative session to authorize a gasoline tax suspension. Braun told reporters Thursday that the current suspension period "gets us close enough to a legislative session where we can look at it more seriously."
However, the suspension carries a significant financial impact. The Indiana Department of Transportation (INDOT) projects that the combined losses from the excise and usage tax suspensions could reach $1.1 billion for state and local road projects if the suspension continues through December 4. Gov. Braun has directed his administration to cover losses to local projects through the State Highway Fund. Nonetheless, legislative approval will be necessary to access the state’s growing cash reserves, which are projected to reach $5.2 billion by next summer, to cover other related costs.
