HB 1382

                                                           Introduced Version
          HOUSE BILL No. 1382
                _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3.5-12; IC 6-8.1-1-1; IC 8-23-30-2.
Synopsis: County option gasoline tax. Allows a county to adopt an
ordinance to impose a county option gasoline tax. Specifies procedures
for imposition and collection of the county option gasoline tax.
Provides that a county may not concurrently impose a county option
gasoline tax and a: (1) county wheel tax; and (2) county vehicle excise
tax. Specifies requirements for a municipality within a county that
wishes to receive a distribution of revenue from the county option
gasoline tax.
Effective: July 1, 2026.
                               Smaltz
   January 8, 2026, read first time and referred to Committee on Ways and Means.
2026  IN 1382—LS 6892/DI 125
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
 Constitution) is being amended, the text of the existing provision will appear in this style type,
 additions will appear in this style type, and deletions will appear in this style type.
   Additions: Whenever a new statutory provision is being enacted (or a new constitutional
 provision adopted), the text of the new provision will appear in this style type. Also, the
 word NEW will appear in that style type in the introductory clause of each SECTION that adds
 a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   HOUSE BILL No. 1382
    A BILL FOR AN ACT to amend the Indiana Code concerning
 taxation.
     Be it enacted by the General Assembly of the State of Indiana:
1   SECTION 1. IC 6-3.5-12 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2026]:
4   Chapter 12. County Option Gasoline Tax
5   Sec. 1. This chapter applies to all counties.
6   Sec. 2. This chapter does not apply to the sale of special fuel.
7   Sec. 3. The definitions in IC 36-1-2 and the following definitions
8 apply throughout this chapter:
9     (1) "Federal gasoline tax" means the excise tax imposed on
10     gasoline under Section 4081 of the Internal Revenue Code.
11     (2) "Gasoline" has the meaning set forth in IC 6-6-1.1-103(g).
12     (3) "Gasoline use tax" means the tax imposed under
13     IC 6-2.5-3.5.
14     (4) "Gross retail income" has the meaning set forth in
15     IC 6-2.5-1-5.
16     (5) "Indiana gasoline tax" means the tax imposed under
17     IC 6-6-1.1.
 2026  IN 1382—LS 6892/DI 125
                                  2
1(6) "Metered pump" has the meaning set forth in
2IC 6-2.5-3.5-6.
3(7) "Person" has the meaning set forth in IC 6-2.5-1-3.
4(8) "Retail merchant" has the meaning set forth in
5IC 6-2.5-1-8.
6(9) "Special fuel" has the meaning set forth in IC 6-6-2.5-22.
7     Sec. 4. (a) Subject to subsections (d) and (e), the county fiscal
8 body may adopt an ordinance to impose an excise tax, known as the
9 county option gasoline tax, on transactions described in section 6
10 of this chapter. Subject to section 7 of this chapter, the ordinance
11 must specify the rate of the county option gasoline tax to be
12 imposed in the county. The county fiscal body may adopt an
13 ordinance under this subsection only after the county fiscal body
14 has held at least one (1) separate public hearing in which a
15 discussion of the proposed ordinance to impose the county option
16 gasoline tax is the only substantive issue on the agenda for the
17 public hearing.
18     (b) If the county fiscal body adopts an ordinance under
19 subsection (a), the county fiscal body shall immediately send a
20 certified copy of the ordinance to the department of state revenue.
21     (c) If the county fiscal body adopts an ordinance under
22 subsection (a), the county option gasoline tax applies to
23 transactions that occur after the later of the following:
24(1) The day specified in the ordinance.
25(2) The last day of the month that succeeds the month in
26which the ordinance is adopted.
27     (d) A county fiscal body that has adopted an ordinance to
28 impose taxes under IC 6-3.5-4 and IC 6-3.5-5 may not concurrently
29 adopt an ordinance to impose the tax under this chapter. If a
30 county fiscal body that has adopted an ordinance to impose the
31 taxes under IC 6-3.5-4 and IC 6-3.5-5 wishes to instead adopt an
32 ordinance to impose the county option gasoline tax under this
33 chapter, the county fiscal body must first adopt an ordinance to
34 rescind the taxes under IC 6-3.5-4 and IC 6-3.5-5 in the manner
35 provided in IC 6-3.5-4 and IC 6-3.5-5, respectively. If a county
36 fiscal body that has adopted an ordinance to impose taxes under
37 IC 6-3.5-4 and IC 6-3.5-5 concurrently adopts an ordinance to
38 impose the tax under this chapter, the ordinance adopted under
39 this chapter is not effective unless the ordinances adopted under
40 IC 6-3.5-4 and IC 6-3.5-5 and corresponding taxes are rescinded.
41     (e) If the:
42(1) fiscal body of a municipality in a county has adopted an
 2026  IN 1382—LS 6892/DI 125
                                  3
1ordinance to impose the taxes under IC 6-3.5-10 and
2IC 6-3.5-11; and
3(2) county fiscal body wishes to concurrently adopt an
4ordinance to impose the county option gasoline tax under this
5chapter and is not otherwise prohibited from adopting the
6ordinance under subsection (d);
7 the county fiscal body may adopt an ordinance to impose the
8 county option gasoline tax under this chapter. However, the county
9 option gasoline tax may not be imposed, paid, or collected in the
10 territory located inside the corporate limits of the municipality, as
11 applicable, and may only be imposed, paid, and collected in the
12 territory in the county that is outside the territory located inside
13 the corporate limits of the municipality, as applicable. In addition,
14 the municipality, as applicable, may not adopt an ordinance or
15 resolution described in section 10 of this chapter, may not receive
16 any distribution of revenue from a tax imposed under this chapter,
17 and the lane mileage of the municipality, as applicable, may not be
18 included in calculating distribution amounts under section 11 of
19 this chapter. However, the limitations in this subsection are no
20 longer applicable if the fiscal body of the municipality subsequently
21 adopts an ordinance to rescind the imposition of the taxes under
22 IC 6-3.5-10 and IC 6-3.5-11.
23    Sec. 5. (a) Subject to this section and section 7 of this chapter,
24 the county fiscal body may adopt an ordinance to rescind,
25 decrease, or increase the county option gasoline tax rate at a public
26 hearing. However, the county fiscal body may take action under
27 this subsection only once every two (2) years.
28    (b) If a county has outstanding bonds, leases, obligations, or
29 other evidences of indebtedness that are payable from the county
30 option gasoline tax, the county option gasoline tax may not be
31 decreased below a rate that would produce one and twenty-five
32 hundredths (1.25) times the total of the highest annual payment
33 requirements due on the bonds, leases, obligations, or other
34 evidences of indebtedness to their final maturity.
35    (c) For purposes of subsection (b), the determination of a tax
36 rate sufficient to produce one and twenty-five hundredths (1.25)
37 times the total of the highest annual payment requirements shall be
38 based on an average of the collections of the county option gasoline
39 tax for the immediately preceding three (3) years, if the tax has
40 been imposed for the preceding three (3) years. If the county option
41 gasoline tax has not been imposed for the preceding three (3) years,
42 the county option gasoline tax may not be reduced below a rate
 2026  IN 1382—LS 6892/DI 125
                                  4
1 that would produce one and twenty-five hundredths (1.25) times
2 the total of the highest annual payment requirements due on the
3 bonds, leases, obligations, or other evidences of indebtedness, based
4 on a study by a qualified public accountant or financial adviser.
5     Sec. 6. (a) A tax imposed under section 4 of this chapter applies
6 to a transaction in which gasoline is sold:
7(1) for purchase at a location from a metered pump;
8(2) in the county; and
9(3) by a retail merchant for consideration.
10     (b) The county option gasoline tax does not apply to the
11 purchase of gasoline to the extent the sale is exempt from the state
12 gross retail tax imposed under IC 6-2.5.
13     Sec. 7. The county option gasoline tax rate:
14(1) must be imposed in an increment of twenty-five
15hundredths of one percent (0.25%); and
16(2) may not exceed two percent (2%);
17 of the gross retail income received by the retail merchant from the
18 transaction described in section 6 of this chapter. However, for
19 purposes of this chapter, the gross retail income received by the
20 retail merchant from a transaction is the price per unit at which
21 gasoline is actually sold, including the gasoline use tax, Indiana
22 gasoline tax, and federal gasoline tax that are part of the sales
23 price.
24     Sec. 8. (a) A tax imposed under this chapter is imposed, paid,
25 and collected in the same manner that the state gross retail tax is
26 imposed, paid, and collected under IC 6-2.5. A retail merchant that
27 sells gasoline shall remit the county option gasoline tax to the
28 department of state revenue for each gallon of gasoline sold. The
29 retail merchant shall remit that amount regardless of the amount
30 of county option gasoline tax that the retail merchant has actually
31 collected under this chapter. However, a retail merchant is entitled
32 to deduct and retain the amounts prescribed in IC 6-2.5-6-10.
33     (b) The return to be filed with the payment of the tax imposed
34 under this chapter may be made on a separate return or may be
35 combined with the return filed for the payment of the state gross
36 retail tax, as prescribed by the department of state revenue.
37     Sec. 9. A retail merchant that has a duty to remit county option
38 gasoline taxes to the department of state revenue or a political
39 subdivision holds those county option gasoline taxes in trust for the
40 state or political subdivision and is liable for the payment of the
41 county option gasoline taxes, plus any penalties and interest
42 attributable to the county option gasoline taxes, to the state or
 2026  IN 1382—LS 6892/DI 125
                                  5
1 political subdivision. A retail merchant that fails to remit the tax
2 or file the returns or reports required by this chapter is subject to
3 the penalties set forth in IC 6-8.1-10.
4     Sec. 10. Except as provided in section 4(e) of this chapter, a
5 municipality that is located in a county that imposes the county
6 option gasoline tax and wishes to receive a portion of the revenue
7 received from the county option gasoline tax shall adopt an
8 ordinance or resolution at a public hearing that expresses:
9(1) the municipality's support of the imposition of the county
10option gasoline tax; and
11(2) the municipality's desire to receive a portion of the
12revenue from the tax.
13     Sec. 11. (a) The amounts received from the tax imposed under
14 this chapter shall be paid monthly by the treasurer of state to the
15 county fiscal officer upon warrants issued by the state comptroller.
16     (b) If a county imposes the county option gasoline tax under this
17 chapter, the county fiscal officer shall establish a county option
18 gasoline tax fund into which all amounts received monthly from the
19 treasurer of state shall be deposited.
20     (c) If a municipality has adopted an ordinance or resolution
21 described in section 10 of this chapter, before the twentieth day of
22 each month, the county auditor shall allocate the money deposited
23 in the county option gasoline tax fund during the previous month
24 among the county and the eligible municipalities in the county on
25 the basis of the county's and each municipality's lane mileage as a
26 percentage of the total lane mileage in the county and all
27 municipalities eligible to receive a distribution.
28     (d) Before the twenty-fifth day of each month, the county fiscal
29 officer shall distribute to the county and the eligible cities and
30 towns in the county the money deposited in the county option
31 gasoline tax fund during the previous month. The county fiscal
32 officer shall base the distribution on the allocations made by the
33 county auditor for the previous month under subsection (c).
34     (e) The fiscal officer of each municipality in the county set to
35 receive a distribution under this section shall establish a local
36 municipality gasoline tax receipts fund. The fiscal officer of each
37 municipality shall deposit in the fund all amounts received under
38 this section.
39     (f) The department of transportation shall provide to the county
40 auditor the total lane mileage for purposes of determining the
41 allocations under subsection (c).
42     Sec. 12. (a) In the case of a county that contains a consolidated
 2026  IN 1382—LS 6892/DI 125
                                     6
1 city, the city-county council may appropriate money derived from
2 the county option gasoline tax:
3(1) to the department of transportation established by
4IC 36-3-5-4 for use by the department under law;
5(2) to an authority established under IC 36-7-23; or
6(3) for the purposes allowed under IC 8-14-1-4(c).
7     (b) The city-county council may not appropriate money derived
8 from the county option gasoline tax for any other purpose.
9     Sec. 13. In the case of a county that does not contain a
10 consolidated city, money in the county option gasoline tax fund
11 must be used by the county only for the following purposes:
12(1) To construct, reconstruct, repair, or maintain streets and
13roads under the county's jurisdiction.
14(2) As a contribution to an authority established under
15IC 36-7-23.
16(3) For the county's contribution to obtain a grant from the
17local road and bridge matching grant fund under IC 8-23-30.
18     Sec. 14. In the case of a municipality that receives a distribution
19 of revenue from a tax imposed under this chapter, money in the
20 local municipality gasoline tax receipts fund may be used only for
21 the following purposes:
22(1) To construct, reconstruct, repair, or maintain streets and
23roads under the municipality's jurisdiction.
24(2) As a contribution to an authority established under
25IC 36-7-23.
26(3) For the municipality's contribution to obtain a grant from
27the local road and bridge matching grant fund under
28IC 8-23-30.
29     Sec. 15. A county option gasoline tax imposed under this chapter
30 is a listed tax for purposes of IC 6-8.1-1.
31     SECTION 2. IC 6-8.1-1-1, AS AMENDED BY P.L.1-2023,
32 SECTION 19, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
33 JULY 1, 2026]: Sec. 1. "Listed taxes" or "taxes" includes only the
34 pari-mutuel taxes (IC 4-31-9-3 through IC 4-31-9-5); the supplemental
35 wagering tax (IC 4-33-12); the riverboat wagering tax (IC 4-33-13); the
36 slot machine wagering tax (IC 4-35-8); the type II gambling game
37 excise tax (IC 4-36-9); the gross income tax (IC 6-2.1) (repealed); the
38 utility receipts and utility services use taxes (IC 6-2.3) (repealed); the
39 state gross retail and use taxes (IC 6-2.5); the adjusted gross income tax
40 (IC 6-3); the pass through entity tax (IC 6-3-2.1); the supplemental net
41 income tax (IC 6-3-8) (repealed); the county adjusted gross income tax
42 (IC 6-3.5-1.1) (repealed); the county option income tax (IC 6-3.5-6)
 2026  IN 1382—LS 6892/DI 125
                                     7
1 (repealed); the county economic development income tax (IC 6-3.5-7)
2 (repealed); the county option gasoline tax (IC 6-3.5-12); the local
3 income tax (IC 6-3.6); the auto rental excise tax (IC 6-6-9); the
4 financial institutions tax (IC 6-5.5); the gasoline tax (IC 6-6-1.1); the
5 special fuel tax (IC 6-6-2.5); the motor carrier fuel tax (IC 6-6-4.1); a
6 motor fuel tax collected under a reciprocal agreement under IC 6-8.1-3;
7 the vehicle excise tax (IC 6-6-5); the aviation fuel excise tax (IC
8 6-6-13); the commercial vehicle excise tax (IC 6-6-5.5); the excise tax
9 imposed on recreational vehicles and truck campers (IC 6-6-5.1); the
10 hazardous waste disposal tax (IC 6-6-6.6) (repealed); the heavy
11 equipment rental excise tax (IC 6-6-15); the vehicle sharing excise tax
12 (IC 6-6-16); the cigarette tax (IC 6-7-1); the closed system cartridge tax
13 (IC 6-7-2-7.5); the electronic cigarette tax (IC 6-7-4); the beer excise
14 tax (IC 7.1-4-2); the liquor excise tax (IC 7.1-4-3); the wine excise tax
15 (IC 7.1-4-4); the hard cider excise tax (IC 7.1-4-4.5); the petroleum
16 severance tax (IC 6-8-1); the various innkeeper's taxes (IC 6-9); the
17 various food and beverage taxes (IC 6-9); the county admissions tax
18 (IC 6-9-13 and IC 6-9-28); the oil inspection fee (IC 16-44-2); the
19 penalties assessed for oversize vehicles (IC 9-20-3 and IC 9-20-18); the
20 fees and penalties assessed for overweight vehicles (IC 9-20-4 and
21 IC 9-20-18); and any other tax or fee that the department is required to
22 collect or administer.
23     SECTION 3. IC 8-23-30-2, AS AMENDED BY P.L.173-2025,
24 SECTION 28, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
25 JULY 1, 2026]: Sec. 2. (a) The local road and bridge matching grant
26 fund is established to provide matching grants to local units for eligible
27 projects.
28     (b) The department shall administer the fund.
29     (c) The fund consists of the following:
30(1) Appropriations by the general assembly.
31(2) Interest deposited in the fund under subsection (d).
32(3) Money deposited in or transferred to the fund from any other
33source.
34     (d) The treasurer of state shall invest money in the fund not
35 currently needed to meet the obligations of the fund in the same
36 manner as other public money may be invested. Interest that accrues
37 from these investments shall be deposited in the fund.
38     (e) Money in the fund at the end of a state fiscal year does not revert
39 to the state general fund.
40     (f) Not later than June 1, 2025, the department shall report to the
41 state comptroller the amount of matching grants awarded by the
42 department from the fund in the state fiscal year beginning July 1,
 2026  IN 1382—LS 6892/DI 125
                                     8
1 2024, and ending June 30, 2025, that the department will not distribute
2 before July 1, 2025.
3     (g) The state comptroller shall determine the balance of the money
4 in the fund on June 15, 2025, and on June 15 of each year thereafter.
5 After determining the balance of money in the fund under this
6 subsection, the money in the fund must be allocated in accordance with
7 subsection (h), transferred in accordance with subsections (i) and (j),
8 and distributed in accordance with subsection (k).
9     (h) After determining the balance of the money in the fund under
10 subsection (g), the money in the fund must first be allocated as follows:
11(1) On June 30, 2025, the department must allocate the total of
12the amount determined under subsection (f) plus one hundred
13million dollars ($100,000,000) of money in the fund to make
14matching grants in the state fiscal year beginning July 1, 2025,
15and ending June 30, 2026, to all local units. The department may
16not award more than one hundred million dollars ($100,000,000)
17of matching grants in the state fiscal year beginning July 1, 2025,
18and ending June 30, 2026.
19(2) On June 30, 2026, and June 30 of each year thereafter, the
20department must allocate the first one hundred million dollars
21($100,000,000) of money in the fund to make matching grants in
22the next state fiscal year to all local units.
23     (i) After the department allocates the money in the fund under
24 subsection (h), the state comptroller shall make the following five (5)
25 transfers:
26(1) On June 30, 2026, a transfer of:
27(A) to the state general fund, the total amount of the state tax
28credits certified for 2025 by the department of state revenue
29under IC 6-3.1-38.1-8(c); and
30(B) to the department, an amount equal to twenty million
31dollars ($20,000,000) minus the amount under clause (A) for
32deposit in the state highway road construction and
33improvement fund established under IC 8-14-10 for the
34department's use in financing a railroad crossing upgrade
35project as described in IC 8-14.5-8.
36(2) On June 30, 2027, a transfer of:
37(A) to the state general fund, the total amount of the state tax
38credits certified for 2026 by the department of state revenue
39under IC 6-3.1-38.1-8(c); and
40(B) to the department, an amount equal to twenty million
41dollars ($20,000,000) minus the amount under clause (A) for
42deposit in the state highway road construction and
 2026  IN 1382—LS 6892/DI 125
                                     9
1improvement fund established under IC 8-14-10 for the
2department's use in financing a railroad crossing upgrade
3project as described in IC 8-14.5-8.
4(3) On June 30, 2028, a transfer of:
5(A) to the state general fund, the total amount of the state tax
6credits certified for 2027 by the department of state revenue
7under IC 6-3.1-38.1-8(c); and
8(B) to the department, an amount equal to twenty million
9dollars ($20,000,000) minus the amount under clause (A) for
10deposit in the state highway road construction and
11improvement fund established under IC 8-14-10 for the
12department's use in financing a railroad crossing upgrade
13project as described in IC 8-14.5-8.
14(4) On June 30, 2029, a transfer of twenty million dollars
15($20,000,000) to the department for deposit in the state highway
16road construction and improvement fund established under
17IC 8-14-10 for the department's use in financing a railroad
18crossing upgrade project as described in IC 8-14.5-8.
19(5) On June 30, 2030, a transfer of twenty million dollars
20($20,000,000) to the department for deposit in the state highway
21road construction and improvement fund established under
22IC 8-14-10 for the department's use in financing a railroad
23crossing upgrade project as described in IC 8-14.5-8.
24     (j) Beginning on June 30, 2027, and on June 30 of each year
25 thereafter, after the department allocates the money under subsection
26 (h) and the state comptroller makes a transfer under subsection (i),
27 when applicable, the state comptroller shall transfer fifty million
28 dollars ($50,000,000) of money in the fund to the consolidated city in
29 Marion County for the construction, reconstruction, and preservation
30 of the consolidated city's local streets (as defined in IC 8-14-2-1(9)).
31 The consolidated city in Marion County shall not use these revenues
32 for:
33(1) reducing the capacity of existing roads and streets;
34(2) greenways;
35(3) bike lanes;
36(4) bike trails; and
37(5) sidewalks.
38 One hundred percent (100%) of the money distributed to the
39 consolidated city under this subsection shall be matched with an
40 appropriation by the consolidated city. The appropriation required
41 under this subsection must be new revenue and may not include
42 revenue allocated to public safety purposes under IC 6-3.6-6.
 2026  IN 1382—LS 6892/DI 125
                                      10
1     (k) Beginning on June 30, 2027, and on June 30 of each year
2 thereafter, after the state comptroller makes a transfer under subsection
3 (j), the state comptroller shall distribute the remainder of the money in
4 the fund, as follows:
5(1) To be eligible to receive a distribution under this subsection,
6a local unit must: have:
7(A) have, in the case of a county:
8(i) adopted either a wheel tax or a county option gasoline
9tax under IC 6-3.5-12; and
10(B) (ii) provided the local technical assistance program at
11Purdue University with an updated transportation asset
12management plan within the last twelve (12) months; and
13(B) in the case of a municipality:
14(i) have adopted a wheel tax; or
15(ii) be located in a county that imposes a county option
16gasoline tax under IC 6-3.5-12 and have adopted an
17ordinance or resolution described in IC 6-3.5-12-10.
18(2) The distribution to a local unit eligible to receive a distribution
19under subdivision (1) must be proportional to the local unit's
20share of the total lane mileage for all local units eligible to receive
21a distribution under subdivision (1). The department shall provide
22to the state comptroller the total lane mileage for purposes of
23making the distribution under this subsection.
24 A local unit may use a distribution made under this subsection only for
25 eligible projects.
26     (l) Money in the fund is continuously appropriated for the purpose
27 of the fund.
28     (m) Money in the fund may not be transferred, assigned, or
29 otherwise removed from the fund by the state board of finance, the
30 budget agency, or any other agency until after budget committee
31 review, except for either or both of the following purposes:
32(1) The department may distribute funds to a local unit that has
33been approved for a grant under this chapter without budget
34committee review.
35(2) To transfer money in the fund under subsections (i) and (j) and
36to make a distribution under subsection (k) without budget
37committee review.
 2026  IN 1382—LS 6892/DI 125