Braun Extends Indiana Gas Tax Holiday, Adds Harvest-Season Relief for Farmers

Sept. 30th

Nearly 61 cents a gallon in state gasoline taxes remain suspended through Nov. 4 as farmers gain access to untaxed dyed diesel

By Hoosier Enquirer Team

INDIANAPOLIS — Indiana motorists will get another month of relief at the pump, while Hoosier farmers facing high diesel costs during harvest season are getting a new break of their own.

Gov. Mike Braun announced Wednesday that Indiana will extend the suspension of the Gasoline Use Tax and Gasoline Excise Tax through Nov. 4. The new statewide energy emergency begins Oct. 6, immediately after the current declaration expires, avoiding any interruption in the tax holiday.

The suspended taxes total nearly 61 cents per gallon. Indiana's average price for regular gasoline was about $3.83 Wednesday, according to AAA figures cited by Indiana news organizations.

Braun also loosened restrictions on dyed, or off-road, diesel, allowing farmers and timber harvesters to use the normally untaxed fuel for additional agricultural purposes, including certain farm-related truck operations on public roads.

The change comes at a critical time for Indiana agriculture. The state's average diesel price reached a record $6.92 per gallon in September, according to the Indiana Capital Chronicle, putting additional pressure on farmers during one of the most fuel-intensive periods of the year.

More than 50 Indiana lawmakers had urged Braun to provide diesel relief, noting that large farming operations can consume thousands of gallons during harvest.

“Affordability is my top priority,” Braun said Wednesday.

The Indiana Department of Revenue estimates the expanded dyed-diesel provision will cost the state approximately $1 million to $3 million per month. Braun characterized that amount as small compared with the benefit to farmers and said Indiana's reserve position gives the state room to absorb the cost.

The larger gasoline-tax holiday carries a considerably higher price tag. Braun said the cumulative savings to Hoosiers have exceeded $1 billion since the suspension began.

Fuel taxes ordinarily provide substantial funding for Indiana roads and bridges, but the administration says transportation funding will be protected by replacing lost revenue from state reserves.

Indiana has already begun doing that. The State Board of Finance previously approved $121.16 million in reimbursements associated with the April and May tax suspensions, including approximately $37.83 million for local governments, restoring money that otherwise would have flowed into highway, road and bridge accounts.

Braun said Indiana has accumulated approximately $2 billion in additional reserves during the past year, providing financial flexibility for the temporary relief.

The policy has also reopened a larger question about how Indiana should pay for transportation in the future. As vehicles become more fuel efficient and electric vehicles take a larger share of the market, revenue from traditional per-gallon gasoline taxes becomes less dependable.

Braun has stopped short of proposing permanent elimination of Indiana's gasoline taxes, but he has acknowledged that the state's transportation-funding system will require a broader discussion.

For now, the impact is much simpler.

Hoosiers will continue paying nearly 61 cents less per gallon in state gasoline taxes through Nov. 4, while Indiana farmers get additional relief from high diesel costs during the heart of harvest season — with the state using its reserves to keep road and bridge funding intact.

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