Indiana drivers pay roughly 69 to 81 cents in combined taxes on every gallon of regular gasoline, depending on the month. The Indiana gas tax per gallon has three layers: a flat 36-cent state excise tax, a state gasoline use tax that is recalculated each month and has run between about 15 and 27 cents so far in 2026, and an 18.4-cent federal excise tax.
The 36-Cent State Excise Tax
The biggest fixed piece is Indiana’s gasoline license tax, charged under Indiana Code 6-6-1.1-201. From July 1, 2025 through June 30, 2026, that rate is 36 cents per gallon, up one cent from the prior year’s 35 cents.1Indiana Department of Revenue. Departmental Notice 43 – Rates for the Gasoline License Tax and Special Fuel License Tax
Distributors technically owe this tax when fuel enters Indiana’s supply chain, but the cost is passed through to consumers and built into the posted pump price. You never see it broken out on the receipt.
The Monthly Gasoline Use Tax
On top of the flat excise, Indiana charges a gasoline use tax that works like a fuel-specific version of the state’s 7% sales tax. Instead of asking cashiers to calculate 7% on a fluctuating retail price, the state converts that percentage into a flat cents-per-gallon rate and republishes it every month based on recent average retail prices.2Indiana Department of Revenue. Gasoline Use Tax
When pump prices climb, this piece climbs with them. Recent monthly rates:3Indiana Department of Revenue. Departmental Notice 2 – Gasoline Use Tax Rate
- January 2026: 15.4 cents per gallon
- February 2026: 14.9 cents per gallon
- March 2026: 15.3 cents per gallon
- April 2026: 17.2 cents per gallon
- May 2026: 23.3 cents per gallon
- June 2026: 26.5 cents per gallon
The swing from 14.9 cents in February to 26.5 cents in June shows how much this piece can move in a single fiscal year.
The 18.4-Cent Federal Excise Tax
The federal government adds its own tax at the refinery or terminal level: 18.3 cents per gallon on gasoline, plus a 0.1-cent Leaking Underground Storage Tank fee, for an effective 18.4 cents.4Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax This rate has not changed since 1993 and requires an act of Congress to adjust.
Add the pieces together for June 2026: 36 cents state excise + 26.5 cents state use tax + 18.4 cents federal = about 80.9 cents in taxes on every gallon.
Diesel Is Taxed at a Higher Rate
If you fill up with diesel instead of gasoline, the numbers are different. Indiana’s special fuel license tax is 61 cents per gallon for July 2025 through June 2026, and the federal diesel excise is 24.4 cents per gallon.1Indiana Department of Revenue. Departmental Notice 43 – Rates for the Gasoline License Tax and Special Fuel License Tax Commercial trucking fleets file and pay through quarterly reports under the International Fuel Tax Agreement.5Indiana Department of Revenue. Fuel Tax – IFTA/MCFT
Refunds for Off-Highway Fuel Use
Indiana’s fuel taxes are meant to pay for roads, so gasoline burned off the highway can qualify for a refund. Farmers are the most common claimants. Gasoline used commercially in combines, harvesters, corn pickers, manure spreaders, and self-propelled equipment for applying fertilizer or agricultural chemicals is eligible for a refund of the gasoline tax paid.6Legal Information Institute. 45 IAC 12-8-7 – Refund for Tax Paid on Gasoline Purchased or Used
Motor carriers can also claim refunds for fuel consumed by power take-off units instead of road propulsion. Carriers use Form Prop-1 for certification and submit quarterly claims on Form MCS-1789. Across every refund category, the underlying rule is the same: the fuel was not used to move a vehicle on a public highway.
What EV and Hybrid Drivers Pay Instead
If you drive an electric or hybrid vehicle, you pay little or no gasoline tax, but Indiana charges a supplemental registration fee to make up the road-funding gap. Fully electric vehicle owners pay an additional $230 per year, and plug-in hybrid or traditional hybrid owners pay an additional $77 per year.7Alternative Fuels Data Center. Electric Vehicle (EV) Registration Fee These fees adjust annually under the same indexing formula that moves the fuel taxes.
Whether that flat fee is more or less than what a comparable gas car pays depends on mileage. A driver putting 12,000 miles a year on a 30-mpg car buys about 400 gallons and pays roughly $200 or more in state fuel taxes, so the $230 EV fee lands in a similar range. High-mileage EV drivers come out ahead; low-mileage drivers may pay more than they would at the pump.
Why the Rate Changes Every July 1
Indiana’s gasoline excise tax is not fixed. Under House Enrolled Act 1002 of 2017, the Department of Revenue recalculates the rate every July 1 using an indexing formula in Indiana Code 6-6-1.6.1Indiana Department of Revenue. Departmental Notice 43 – Rates for the Gasoline License Tax and Special Fuel License Tax The formula averages the year-over-year change in the Consumer Price Index and the year-over-year change in Indiana personal income, then applies that blended percentage to the prior year’s rate.
A statutory cap limits how much the rate can move in any single year. The Department of Revenue has confirmed that cap is two cents per year for the diesel tax, and the gasoline excise runs under the same indexing statute. For diesel this year, the formula produced a calculated 62 cents, but the cap held the increase to a penny, landing at 61 cents. The indexing is scheduled to run through July 1, 2027.8Indiana General Assembly. Indiana Code 6-6-1.6-3 – Calculation of Annual Index Factors Without further legislation, the rate would freeze at whatever level it reaches on that date.