INDIANAPOLIS, Ind. (May 6, 2026) — Indiana motorists will see immediate relief at the pump following Governor Mike Braun’s announcement Wednesday extending the suspension of the state sales tax on gasoline and temporarily pausing the state gas tax for the next 30 days.
Combined, the dual tax suspension will save drivers 59.3 cents per gallon, according to information released by the governor’s office.
“Making life more affordable for Hoosiers will always be my top priority,” Braun said. “Suspending both the gas tax and excise tax gives Hoosiers meaningful relief for the next month.”
Details of the Suspension
- State Gas Tax: 36 cents per gallon, now temporarily paused.
- Sales Tax on Gasoline: Originally suspended in April for 30 days, now extended an additional 30 days.
- Total Expected Cost: $104 million to state coffers; $52 million to local units.
The initial 30-day sales tax suspension was implemented in early April and projected to cost the state $50 million. Combined with the new gas tax suspension, the temporary measures are expected to provide a 12.4% discount on the average Indiana gasoline price, according to the AAA.
The average price for a gallon of gas in Indiana has risen from $4.14 in April to $4.76 as of early May, highlighting the economic pressures Hoosiers are facing.
Additional State Employee Benefits
Governor Braun also announced plans to increase mileage reimbursement rates for state employees who use personal vehicles for work-related travel. The details of this change are pending confirmation from the governor’s office.
Context and Purpose
Braun framed the tax suspensions as an immediate response to rising fuel costs amid ongoing energy market pressures. The announcement aligns with the state’s broader efforts to ease financial burdens on families and individuals dependent on gasoline for daily commuting and business operations.
“Suspending both the gas tax and excise tax gives Hoosiers meaningful relief for the next month,” Braun reiterated, emphasizing the temporary nature of the emergency measure while also noting the importance of long-term infrastructure funding.
Economic Impact
While the tax relief provides short-term savings at the pump, it comes at a substantial cost to state and local budgets. The suspension of the gas and sales tax on gasoline reduces immediate revenue that typically funds roads, highways, and other transportation infrastructure projects across Indiana.
Transportation experts and analysts note that while such tax holidays can provide temporary relief, long-term infrastructure maintenance must balance these fiscal impacts, ensuring that road projects and other essential services are not jeopardized.
For travelers and commuters: Drivers should expect discounted gasoline prices at pumps statewide starting immediately, with the temporary tax breaks remaining in effect for 30 days.
