INDIANAPOLIS — Indiana is set to see the highest December gasoline use tax on record, but signs indicate there may be some relief at the pump.
The Indiana Department of Revenue recently published the gasoline use tax calculation for December. The calculation shows the rate starting December 1 will be 23.3 cents, up from 23.1 cents in November.
The department calculates the gasoline use tax by taking the average retail price per gallon of gasoline in the prior month and multiplying it by the state retail tax of .07 cents. The state said the average retail cost was $3.3295.
This is the highest December gasoline use tax on record. The tax has increased steadily since it reached its lowest point on record in June 2020. The gasoline use tax is higher than at any point before 2022.
In addition to the gasoline tax, people buying gasoline pay additional state and federal taxes. As of July, people pay 33 cents per gallon in gas excise tax, which goes towards infrastructure projects, and a federal tax of about 18 cents per gallon.
Indiana has one of the highest gas excise taxes in the country. Only 13 states have a higher gas excise tax than Indiana, according to data compiled by IGEN. However, both the neighboring states of Ohio and Illinois have higher gas excise taxes.
If the average retail cost of gasoline remains at $3.3295 in December, people would end up paying around $4.07 at the pump. As of October 26, AAA reports the average cost of gas in Indiana is about $3.845.
AAA reports that oil prices are being driven down due to increasing supply and falling gasoline demand. If demand remains low, drivers will likely continue to see pump prices decline ahead of Thanksgiving.
“Everyone will be seeing relief at the pump this week, with even more substantial declines on the way as oil prices plummeted last week to briefly trade under $80 per barrel. It’s not impossible that if oil markets hold here, we could see a national average of $2.99 around Christmas, certainly the gift that every motorist is hoping for,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Drivers shouldn’t be in a rush to fill up as prices will come down nearly coast-to-coast into the heavily traveled Thanksgiving holiday.”