Governor Mike Braun Extends Indiana Gas Tax Suspension Through October 6, Saving Motorists 60 Cents a Gallon

INDIANAPOLIS — Indiana motorists will continue receiving direct financial relief at the fuel pump through early autumn, as Governor Mike Braun signed an executive directive extending the statewide suspension of both the state gasoline excise tax and the gasoline sales tax through October 6, 2026.

The extension, authorized under statutory gubernatorial emergency powers, continues a comprehensive fuel tax holiday originally instituted in the spring. By maintaining the suspension, the state eliminates Indiana's 37-cent-per-gallon motor fuel excise tax as well as the 7 percent prepaid gasoline sales tax, collectively reducing retail fuel prices by approximately 60 cents per gallon for everyday commuters, agricultural operators, and commercial transport fleets across the Hoosier State.

Governor Braun affirmed that the executive action was necessary to shield Indiana households and local enterprises from persistent global energy market instability and supply chain cost pressures.

Hoosier families and small business owners continue to feel the squeeze of high consumer costs and volatile energy markets, Governor Braun stated in an official announcement from the Statehouse. By extending this fuel tax suspension into October, our administration is providing tangible, immediate pocketbook relief to every driver in Indiana. Government should work to ease financial burdens on working families whenever possible, and we will continue leveraging our state's strong fiscal standing to keep money where it belongs: in taxpayers' pockets.

The decision to waive fuel taxes relies on the statutory invocation of an ongoing state energy emergency. Under Indiana law, the governor possesses executive authority to declare short-term energy emergencies and adjust energy-related taxes during periods of severe price disruption or supply dislocation, subject to monthly administrative renewal.

The policy has generated broad approval among consumer advocacy organizations, logistics associations, and retail merchant groups, who note that fuel savings immediately translate into reduced operating overhead for shipping carriers and greater disposable income for retail shoppers.

However, the continued tax holiday has reignited legislative discussions regarding long-term infrastructure funding mechanisms. The gasoline excise tax serves as the primary revenue stream dedicated to the Indiana Department of Transportation (INDOT) and municipal street departments for highway resurfacing, bridge rehabilitations, and county road repairs under the state's Community Crossings grant program.

Transportation infrastructure coalitions and municipal leaders have raised concerns that prolonged tax holidays could deplete dedicated transportation trust funds if replacement mechanisms are not permanently codified. In response, Governor Braun and state fiscal leaders reiterated that all foregone transportation revenues are being fully backfilled dollar-for-dollar from Indiana's healthy general fund reserves, ensuring that scheduled capital construction projects and county road maintenance allocations proceed without disruption or delay.

Fiscal analysts in the General Assembly note that while Indiana’s budget reserves remain robust, the ongoing gas tax holiday will form a central focal point of budgetary deliberations when lawmakers convene in Indianapolis for the upcoming biennial budget session, where representatives will debate whether permanent rate restructuring or targeted rebates offer the most sustainable path for state tax policy.

Regional economic observers note that neighboring states—including Illinois, Michigan, and Ohio—continue to levy full motor fuel taxes, prompting significant cross-border fueling activity along Interstate 80, Interstate 65, and Interstate 69 as out-of-state freight corridors take advantage of Indiana's substantially reduced pump prices.