Indiana just did something that hasn't happened in modern history.
On May 6, 2026, Governor Mike Braun suspended both the state's gas sales tax and the gas excise tax simultaneously — saving Hoosier drivers nearly 60 cents per gallon at the pump.
It's the first time any Indiana governor has done both at once. And it's happening because gas prices in the state have become a genuine crisis.
Here's what's going on — and why it matters beyond Indiana's borders.
Bad. Fast.
Indiana gas prices skyrocketed by $1.05 per gallon in just seven days, with the state average hitting $4.83 per gallon — 92.6 cents higher than a month ago and $1.64 per gallon higher than this time last year. TaxJarTaxJar
Indiana, a state where drivers are used to paying below the national average, suddenly found itself in the top 10 most expensive states for gasoline. Taxfyle
The Great Lakes region — Michigan, Indiana, Ohio, and Wisconsin — bore the brunt of the volatility, driven by a combination of Middle East conflict disrupting global supply and regional refinery issues compounding the problem. TaxHero
In Indianapolis, prices hit $4.99 per gallon. The Sales Tax People
Indiana's gas tax isn't a single tax. It's two separate taxes:
Braun had already suspended the sales tax side in April, when prices were averaging around $4.13 a gallon. That alone saved about 17 cents per gallon but left the bigger excise tax in place — and critics noticed.
Then prices kept climbing.
On May 6, Braun went further. He extended the gas sales tax suspension for another 30 days and added a full suspension of the excise tax on top of it — the first time in modern history an Indiana governor has done both simultaneously.
Combined, the two suspensions add up to $0.59 a gallon in savings — a 12.4% discount on the average price of gasoline in Indiana. The Sales Tax People
This relief doesn't come free.
The 30-day suspensions combined are expected to cost state coffers $104 million, plus an additional $52 million for local units of government. That's on top of the $50 million revenue cost from Braun's initial 30-day sales tax suspension in April.
The excise tax, in particular, funds Indiana's road infrastructure. Braun had previously resisted suspending it for exactly that reason — every dollar of excise tax not collected is a dollar not going to highways, bridges, and potholes. But with prices pushing toward $5 a gallon, the political calculus changed.
The state still collected $283.7 million through the gasoline sales tax in April and is $425.7 million above fiscal year projections — which gave Braun the cushion to act.
Here's the part that everyone in Indiana is now watching.
This extension is the longest Braun can suspend the gas tax under his own executive authority. Another extension beyond this would require calling a special legislative session. The Sales Tax People
The current suspension runs through early June — covering Memorial Day weekend, one of the biggest driving periods of the year. After that, Braun's unilateral power runs out.
If prices haven't come down by then, Indiana lawmakers will face a choice: return for a special session to extend the relief, or let the taxes snap back at the pump when drivers are already stretched thin heading into summer.
Indiana is the most dramatic example right now, but it's not alone.
Georgia, Utah, and Indiana have all implemented gas tax holidays in 2026 in response to surging prices. At the federal level, the Gas Prices Relief Act of 2026, introduced by Senators Mark Kelly and Richard Blumenthal, would establish a federal gasoline tax holiday lasting until October 1. A companion bill has been introduced in the House.
Pennsylvania is weighing both a 60-day state gas tax suspension and a six-month gas and diesel tax holiday proposal starting June 1.
The pattern is the same everywhere: prices spike, politicians reach for the tax suspension lever, and the debate over infrastructure funding versus immediate consumer relief starts all over again.
Gas tax suspensions create a specific compliance challenge that most businesses don't think about until it's too late.
When a state suspends its gas sales tax, the rate businesses must collect — and remit — changes immediately. Point-of-sale systems need to be updated. If you're operating fuel-related businesses in Indiana or any state implementing a tax holiday, your collection and remittance obligations change on the day the suspension takes effect, not on your next filing cycle.
There's also the price gouging angle. Indiana's Attorney General has initiated price gouging investigations into retailers across the state and sent warning letters to stations it is monitoring — a reminder that tax relief is only meaningful if businesses actually pass the savings through to consumers. The Sales Tax People
Regulators are watching.
Questions about how gas tax changes or state tax suspensions affect your business's compliance obligations? Book a free consultation with our team at sales.tax. We'll walk through exactly what you need to update — and when.