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December 5, 2022

Small business group asks Indiana legislators to suspend gas tax

The largest small-business group in the state, the National Federation of Independent Business, is calling for the immediate suspension of Indiana’s gas tax.

“The General Assembly recently passed a comprehensive tax relief package, but it could not anticipate the impact on Hoosiers from the ban on Russian oil imports,” said Natalie Robinson, the state director of the NFIB, in a statement.  “Indiana’s small businesses were already negatively impacted by inflation, the fallout from the pandemic and the dramatic increase in gas prices could be the death knell for some.”

Indiana’s gas tax became one of the highest in the country when it was raised in 2017 by 10 cents a gallon. It’s now 32 cents a gallon and has been rising steadily. The bill passed in 2017, authored by Rep. Ed Soliday, R-Valporaiso, put gas tax increases on auto pilot, allowing it to go up by 1 cent every year.

Now, with a gallon of gas in Indianapolis going for $4.23, up from $2.70 just a year ago, businesses are stressed, especially those whose business requires travel, and more are eyeing the state tax and questioning why it’s needed, the group said.

Stephen Cull, owner of a company in Rushville, Indiana that sells and services vending machines, says gas prices are hitting his company hard.

“Basically, it’s costing us an extra $200 a week,” he says. “That adds up quick.”

He says his company, Value Vending, which he runs with his daughter, lost about 70% of its business during the pandemic and they’re still trying to recoup.

“We scratched and clawed our way back from that,” he said, “and now we’ve got to deal with high fuel prices.”

He’s skeptical the Indiana General Assembly or the governor will suspend or roll back the gas tax but wishes they would.

“We never ask for freebies,” he says. “We just ask for some of our taxes back to help us survive.”

The Coalition of Central Indiana Tea Parties had vigorously opposed the gas tax bill in 2017 and testified against it at the Statehouse.

“One of the things that was onerous about it, we were promised all the roads would be fixed,” says Michael Morris, the legislative director of the coalition. “Well, drive around Indiana and see…I didn’t see discernible improvement with that tax.”

The coalition, he said, was particularly opposed to the provision allowing the tax to increase by 1% a year.

“Every time legislators increase a tax, they should have to stand before voters and account for it,” he says.

Last week, Democrats also spoke out about the state gas tax, calling for both the sales tax on gas of 7% and the gas excise tax of 32 cents per gallon to be suspended for three months.

“For years, the supermajority has said they’re on the side of working Hoosiers – if that’s true, cutting the gas taxes should be an easy yes,” said Sen. Tim Lanane, D-Anderson. He was joined by Rep. Gregory Porter, D-Indianapolis, who said Indiana, with its $5 billion surplus, can afford to suspend both taxes.

“Now it’s time to use that surplus to alleviate the burden of surging gas prices for working Hoosiers,” Porter said.

This article was originally posted on Small business group asks Indiana legislators to suspend gas tax