Indiana gas-tax suspension continues through Sept. 5. What drivers and road agencies should know

Indiana’s gasoline-tax suspension did not permanently end on Aug. 6. Executive Order 26-16 expired after that date, but Gov. Mike Braun issued Executive Order 26-20 on Aug. 5, continuing the suspension from Aug. 7 through Sept. 5, 2026.

That means Indiana drivers remain affected by the suspension of the state’s Gas Use Tax and Gasoline Excise Tax. At the same time, state and local transportation accounts are losing revenue they normally receive from fuel taxes, with replacement money being approved in stages.

What changed after Aug. 6

Executive Order 26-16 covered the previous suspension through Aug. 6. Executive Order 26-20, issued Aug. 5, declared a new energy emergency for all Indiana counties and continued the suspension beginning Aug. 7.

The orders are consecutive. The scheduled expiration of Executive Order 26-16 did not end the suspension because Executive Order 26-20 established a new period immediately afterward.

The current order sets Sept. 5 as the scheduled end date unless the governor terminates or extends the emergency by another order. Taxes therefore are not guaranteed to resume on Sept. 5 if the state takes additional action.

What drivers should expect at the pump

The suspended taxes are Indiana’s Gas Use Tax and Gasoline Excise Tax. According to the Indiana Department of Revenue, both are collected at the distributor level rather than charged as separate retail taxes at the pump.

Suspending collection at the distributor level is intended to reduce the price passed through to the pump. Drivers should not expect every station to show the same reduction, however. Retail prices also reflect wholesale fuel costs, market conditions and station pricing.

The Department of Revenue says distributors and retailers must follow its filing, reporting and reconciliation instructions for the affected periods. The agency’s guidance also says retailers should work with their distributors if suspended-period taxes were collected from them.

Why road agencies are part of the story

Fuel-tax collections support transportation accounts including the Motor Vehicle Highway Fund, the Local Road and Street Fund and the Local Road and Bridge Matching Fund. Those accounts help distribute roadway money to the state, counties, cities and towns.

The suspension does not eliminate every source of road funding. The state comptroller’s office said other revenue distributed through the Motor Vehicle Highway and Local Road and Street accounts continued on regular schedules. But suspending the two fuel taxes reduces the revenue flowing into accounts used for roadway and infrastructure work.

How reimbursement works

On July 21, the State Board of Finance approved $121,159,722 for the suspension period from April 8 through May 31, according to the Indiana State Comptroller’s Office. The money was directed to the Motor Vehicle Highway Fund, the Local Road and Street Fund and the Local Road and Bridge Matching Fund.

Of that total, $37,834,329.54 was designated for local units of government. The reimbursement formulas follow the same statutory formulas used for normal Motor Vehicle Highway and Local Road and Street distributions.

The first approval covered only the April-through-May period. Additional reimbursement requests must go before the State Board of Finance, and the comptroller’s office expects all reimbursements to be completed by Nov. 1, pending those future approvals.

For counties, cities and towns, that means replacement transportation money may arrive in stages rather than as one completed payment covering the entire suspension. Local governments will need to track later Board of Finance actions when planning roadway and bridge spending.

How large is the fiscal effect?

Indiana Capital Chronicle reported that the gas-tax suspensions could reduce state and local revenue by approximately $533 million combined. That is an estimate, not a final audited total.

The reimbursement program is intended to restore eligible roadway revenue for local governments and transportation accounts, but the timing and amount of each later payment remain subject to the state’s reimbursement calculations and future Board of Finance approvals.

What happens next

• Drivers: The current suspension runs through Sept. 5, 2026, under Executive Order 26-20.
• Distributors and retailers: Department of Revenue filing, reporting and reconciliation rules remain in effect for the affected periods.
• Local governments: Additional reimbursement packages require State Board of Finance approval.
• Transportation funding: Other Motor Vehicle Highway and Local Road and Street revenue sources continue on their regular schedules, according to the comptroller’s office.
• Reimbursement deadline: The comptroller’s current target is to complete reimbursements by Nov. 1, subject to future approvals.

Drivers should watch for updated Department of Revenue guidance if another executive order changes the timeline. Local governments should monitor State Board of Finance actions for subsequent reimbursement approvals and distributions.

Sources

• Indiana Department of Revenue gasoline-use-tax guidance
• Indiana Capital Chronicle: Gas tax breaks to cost state, local governments $533M

Look for updates to this story

Related News

• Kentucky tax portal set to reopen Aug. 14 after system conversion
• Indiana recount changes winner in three-vote state Senate primary
• Kansas voters reject plan to elect Supreme Court justices, preserving merit selection
• Iowa families had until August 14 to apply for $120-per-child SUN Bucks benefits