Hoosiers are set to see a slight change at the fuel pumps next month as Indiana's gas tax is expected to increase by 1 cent. Gasoline Tax Increase: The state's current 34 cents per gallon gasoline tax will see a bump up to 35 cents on July 1. It is important to note that this tax is not tied to the fluctuating fuel prices and rises by 1 cent annually on July 1, as mandated by Indiana law. While the gasoline tax is going up, there is good news for consumers as Indiana's sales tax on gasoline is set to decrease in July. Sales Tax Decrease: Indiana's 7% sales tax on gasoline purchases will be reduced to 20.1 cents a gallon starting July 1, down from 20.5 cents in June. This approximately 2% decrease was announced recently by the Indiana Department of Revenue. The new rate was determined based on the statewide average pre-tax gasoline price, which stood at $2.8655 a gallon during the May 16 to June 15 tracking period. This represents a 2.1% decrease from the previous period's average of $2.9266 per gallon. This upcoming tax decrease in July, though modest, marks the first decrease since February when the rate was at a low of 15.5 cents per gallon. This reduction follows a series of increases over the past four months. It is worth noting that the federal gas tax of 18.4 cents per gallon remains unaffected by the rising fuel prices and has remained unchanged since 1993. When considering both state and federal taxes, Hoosiers will be paying a total of 73.5 cents in taxes for every gallon of gasoline purchased in June, up by about 0.8% from the previous month. The revenue generated from Indiana's gasoline sales tax is designated for funding various state and local road construction projects. Stay informed about these changes as you prepare for your fuel expenses in the upcoming month.