Gas prices will be on the rise as state tax takes effect - Fox 28: South Bend, Elkhart IN News, Weather, Sports

Gas prices will be on the rise as state tax takes effect

Indiana drivers will pay more at the pump under the new Gas Use Tax Indiana drivers will pay more at the pump under the new Gas Use Tax
Looking forward to the Fourth of July weekend? Preparing a get-away trip? Indiana residents will also have to plan on spending a bit more at the pump. On July 1, Indiana will change from a flat rate tax for gas, to one based on a percentage.

The current flat rate is a 19-cent-per gallon sales tax. Under the Gas Use Tax, the rate will change to seven percent of the average gas price for the state for the previous month.

Terry Hoeksema is an Elkhart resident who was filling up at the pump on Monday evening. "I think they're too high," Hoeksema said about current gas prices. "I mean it's coming down a little bit here now. When it starts getting up to the four dollar range, that's crazy."

Gas Buddy Petroleum Analyst Patrick DeHaan spoke with FOX28 News about the changes going into effect on July 1. "As prices stand today, motorists will be shelling out just a little bit more money than they were before the tax effect," DeHaan said.

DeHaan says motorists will pay about a penny more per gallon under the percentage based tax. "You might not notice it today, but heaven forbid prices go up to four dollars a gallon you'll be spending about five to seven cents a gallon more that will be going to Indiana," DeHaan said.

He says as long as gas prices stay at higher levels, the state will come out ahead because of the change. DeHaan says Indiana will make 1.3-cent-per-gallon more in the month of July.

"As long as they're going to put it to good use. But when I don't see where the money is going and I'm throwing into this thing and it keeps going up higher, higher and higher, that's not right.," Hoeksema said.

DeHaan says the price of gas per gallon was 23 cents cheaper last year on this date. He also says the only way this doesn't fall on the consumer is if prices were to drop to about 1.50 per gallon. In that scenario drivers would pay 12 cents less under the new Gas Use Tax.

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