Change in Gasoline Use Tax Rate

Indiana has declared a change in how Gasoline Use Tax is calculated. The state will be switching from a prepaid sales tax on gasoline, which was collected from retailers, to a gasoline-use tax based on a rolling monthly statewide average that is collected from distributors. The tax rate could change from month to month depending on the average price for gasoline. Before today, we calculated use tax by multiplying the price for a gallon of gasoline by 7%.

As of today (July 1, 2014), the new gas use tax will be 7 percent of the average price of gasoline in the state during the previous month. The Departement of Revenue will release what the new tax rate will be every month. The Department of Revenue has released the July’s gas tax will be $0.229 per gallon, calculated off of an average price of $3.269.


Tax Example


Here is the statement released by the Indiana Department of Revenue:

Indiana Tax Notice July 2014

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