A motorist fills up the tank of a vehicle at a Costco gasoline station on Thursday, Nov. 30, 2023, in Thornton, Colo. (AP Photo/David Zalubowski)
Hoosiers will pay more in taxes at gasoline pumps starting March 1.
The state’s 7% sales tax applied on gasoline purchases will be 16.9 cents a gallon starting next month, up from 15.5 cents a gallon in February. The approximately 8.3% increase was announced in a notice Tuesday by the Indiana Department of Revenue.
Officials calculated the new rate by using the statewide average pre-tax price for gasoline, which rose to $2.4153 a gallon during the Jan. 16-Feb. 15 tracking period. This is up by about 8.5% from $2.2104 a gallon in the previous period, according to state records.
March’s gas sales tax rate will be the highest monthly rate since December when drivers paid 18.6 cents a gallon. It is also the first increase since October, records show.
The sales tax rate is separate from Indiana’s 34 cents a gallon gasoline tax, which is not impacted by the rising price of fuel. The 34 cents a gallon tax last increased by 1 cent on July 1, per Indiana law.
Rising fuel prices also do not affect the federal gas tax of 18.4 cents a gallon. The federal tax has been unchanged since 1993, records show.
Hoosiers will pay 69.3 cents in taxes combined, including 50.9 cents in state taxes, for every gallon of gasoline they purchase in March. This is up by 2% from 67.9 cents in February, records show.
Revenue from Indiana’s gasoline sales tax is earmarked for state and local road construction projects.
