2026 gas tax holidays

Rising prices at the pump have inspired lawmakers in several states to suspend motor fuel taxes. 

Gas tax holidays last made headlines in the United States in 2022, when gas prices soared due to Russia’s invasion of Ukraine, a post-pandemic surge in demand, and other factors. Connecticut, Florida, Georgia, Maryland, New York, and Puerto Rico all declared gas tax holidays in 2022, while Colorado, Illinois, and Kentucky delayed scheduled gas tax hikes.

• At least four states are providing gas tax holidays in 2026: Georgia, Indiana, Kentucky, and Utah.

• Gas tax holidays are being discussed in several other states, including Alabama, Arizona, Connecticut, Florida, Maryland, New York, Pennsylvania, and South Carolina. A California gas tax bill died.

• Gas tax holidays last made headlines in 2022, when gas prices soared due to Russia’s invasion of Ukraine, a post-pandemic surge in demand, and other factors.

We’ll update this list if additional states provide gas tax holidays.

Georgia

Georgia House Bill 1199, signed into law by Governor Brian P. Kemp on March 20, 2026, immediately suspended the collection of motor fuel excise taxes.

The 2026 Georgia gas tax holiday was originally set to run from 11:00 a.m. on March 20 to 11:59 p.m. on May 19, 2026, but on May 15, Governor Kemp extended the suspension period through June 2, 2026.

Georgia’s gas tax holiday applied to all fuels subject to Georgia motor fuel excise tax imposed under O.C.G.A. § 48-9-3, including but not limited to:

• Aviation gasoline
• Clear diesel
• Compressed natural gas
• Ethanol
• Gasohol
• Gasoline
• Liquid propane gas
• Liquified natural gas

The gas tax holiday did not apply to local sales or use taxes. See the Georgia Department of Revenue for more details.

Indiana

On April 8, 2026, Indiana Governor Mike Braun signed an executive order establishing a 30-day gas tax holiday. The order suspended the state’s 7% sales tax on gasoline from April 8 through May 8, 2026, at which point the governor reevaluated the continued need for the gas tax holiday “based on the circumstances in the Middle East.”

On May 6, 2026, the governor extended the energy emergency until June 7, 2026.

On June 3, 2026, Governor Braun renewed the proclamation of energy emergency, extending the suspension of gas use tax and gasoline excise tax through July 7, 2026. 

See Indiana Department of Revenue’s guidance for the gas use tax holiday for specifics.

Kentucky

On May 5, 2026, Kentucky Governor Andy Beshear signed an emergency regulation (Executive Order 2026-235) to freeze the gas tax ahead of an expected increase on July 1, 2026. The executive order also reduced the state gas tax and state tax on diesel fuel and other special fuels by 10 cents per gallon effective May 11, 2026.

On June 9, 2026, Governor Beshear extended the state of emergency declared under Executive Order 2026-235 through June 30, 2026, for local governments that requested an extension.

In counties that didn’t request such an extension, the 10-cent gas tax holiday ends effective June 11, 2026.

See the Kentucky Department of Revenue for current motor fuel tax rates.

Utah

Utah is reducing the state gas tax by 15% from July 1 through December 31, 2026. Signed into law on March 23, 2026, House Bill 575 applies a tax rate of $0.319 per gallon upon all motor fuel sold, used, or received for sale or use in the state. 

Legislation to temporarily reduce gas taxes has also been introduced in Alabama, Arizona, California, and South Carolina. California’s bill died but there’s life in the other bills yet.

Gas tax holidays are also being discussed in Connecticut, Florida, Maryland, New York, and Pennsylvania. 

Finally, Senate Mark Kelly of Arizona has introduced legislation to suspend the federal gas tax, which is 18.4 cents per gallon.

Gas tax holidays can complicate compliance for fuel sellers, distributors, and tax teams for several reasons. For instance: 

• Fuel tax suspensions often take effect shortly after being announced, giving businesses little to no time to update POS systems, tax engines, billing, and accounting rules so the tax is (or isn’t) correctly applied during the suspension period. 

• Gas tax holidays often only suspend certain taxes, so sellers must distinguish between the taxable and nontaxable components. 

• There are often different reporting and recordkeeping requirements during tax holidays. 

Simply put, gas tax holidays often create more work for distributors and retailers. 

Avalara helps ease the burden of gas tax holidays for businesses by maintaining up-to-date fuel tax content and automating rate changes in your tax engines. Avalara cloud-based tax and compliance solutions for fuel and energy providers make sure the right tax is applied — or not applied — in each jurisdiction during a holiday. We also streamline return preparation and recordkeeping for fuel and excise taxes, helping tax teams keep pace with new reporting requirements and reduce audit risk. 

Learn about Avalara fuel and energy tax solutions. 

What is a gas tax holiday?

A gas tax holiday is a temporary suspension or reduction of taxes on motor fuel, usually at the state level. States may stop collecting per-gallon excise taxes, sales and use taxes on gasoline, or other fuel-related taxes, so drivers pay less at the pump for a limited time. 

Which states have the highest gas taxes?

State gas tax rates vary widely and are subject to change. California, Illinois, Washington, Pennsylvania, and Indiana typically have the highest gas taxes, while Alaska, Hawaii, New Mexico, and Arizona have some of the lowest, according to the Tax Foundation.

Will gas prices go down in 2026?

The national average for a gallon of regular gasoline has skyrocketed since the start of the war with Iran. It topped $4 per gallon on April 2, 2026, for the first time since August 2022 according to AAA motor club. The following week, the national average hit $4.16. The temporary ceasefire reached with Iran on April 7 could eventually lead to lower prices at the pump.

The blog post was updated on June 11, 2026.