Why It Matters
Indiana’s continued suspension of state gasoline taxes affects fuel costs for millions of drivers and diverts hundreds of millions in revenue from road maintenance and local infrastructure projects. The state’s decision to maintain the tax break through early September signals the administration’s priority on consumer fuel prices amid global energy disruptions.
What Happened
Governor Mike Braun issued an executive order Wednesday extending Indiana’s suspension of state gas taxes through September 5, pausing levies that were scheduled to be reimposed Friday. The extension continues a tax break that Braun first initiated in April and fully implemented in May, citing volatile global energy markets as justification.
Braun invoked the state’s energy emergency law to justify the renewed suspension, citing Russia’s ongoing invasion of Ukraine and its disruption of global oil shipping routes, as well as Canadian wildfires affecting Alberta’s oil production capacity. “These disruptions have created new pressures on fuel prices that are driving the price of gas for Hoosiers to unnatural levels outside the norm of standard economic conditions,” Braun told the Indiana Capital Chronicle.
The governor pledged to reassess conditions in 30 days to determine whether another pause would be warranted. Rather than convening a special legislative session, Braun reached an agreement with Republican and Democratic leaders to use state surplus funds to offset lost gas tax revenue, reimbursing local governments through the State Highway Fund.
Republican House Speaker Todd Huston issued a statement backing the move, as did Republican state Attorney General Todd Rokita, who told the Indiana Capital Chronicle the action was “within the Governor’s authority to give Hoosiers temporary and much needed relief at the pump based upon changed conditions.”
Democratic legislators welcomed the relief for consumers but questioned the global rationales for the emergency declaration. State officials began reimbursing local jurisdictions for lost revenue last month.
By the Numbers
- 58.9 cents per gallon — Indiana’s state gas tax rate
- 30 days — duration of the latest tax suspension extension
- $533 million — projected revenue decline from the initial four months of tax suspension
- 120 days — maximum period the governor may act under the state energy emergency law without legislative approval
Zoom Out
Multiple states have experimented with temporary gas tax suspensions or reductions in response to fuel price volatility, particularly after geopolitical events disrupted global energy markets. Indiana’s approach—using executive emergency authority and legislative budget cooperation rather than special session votes—reflects a political consensus on consumer relief despite disagreement over underlying causes.
The reliance on state surplus funds to cover forgone tax revenue is temporary; sustaining this approach long-term would require either restoration of the tax or structural budget adjustments. Most states that have tried gas tax holidays have reinstated them within months, as the revenue impact becomes apparent in delayed road projects and infrastructure maintenance.
What’s Next
Braun will conduct a 30-day review to determine whether to extend the suspension again or allow the tax to resume on September 5. If he continues the emergency declaration, the suspension could persist until the 120-day statutory limit is reached unless the legislature returns to formally authorize additional extension. Local governments and the State Highway Fund will continue drawing from the state surplus to cover lost revenue in the interim.