Indiana gas tax set to increase starting July 1

LOUISVILLE, Ky. (WDRB) -- Hoosiers will pay more at the gas pump this summer.

Starting July 1, Indiana's gas tax will go up by one cent to 34 cents per gallon.

The change is part of an annual increase set to expire in 2024, but legislators recently voted to extend it by three years.

The inflation-related increase for the fuel tax the goes toward infrastructure projects currently rings in at 33 cents a gallon. That will go up the maximum of a penny to 34 cents a gallon on July 1, the Indiana Department of Revenue said.

That increase has been allowed each July since 2017 when a Republican-sponsored plan boosted it to 28 cents from 18 cents. The annual increase was set to expire in 2024, but it was extended until 2027 with a little-discussed provision included in the state budget bill approved by GOP-dominated Legislature in late April and signed by Gov. Eric Holcomb.

Republicans rebuffed calls from Democrats last year to suspend state gasoline taxes when pump prices jumped after the Russian invasion of Ukraine. The state gas levy also includes a 7% sales tax that will stand at 20.3 cents a gallon during May.

According to state data, the annual cent increase generates around $30 million in revenue.