2026 gas tax holidays

• Georgia, Illinois, Indiana, Kentucky, and Utah are providing gas tax holidays or delaying motor fuel rate increases in 2026 due to rising fuel prices. 

   

• 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.

Illinois

Public Act 104-0468 suspended the motor fuel tax rate increase that was scheduled to take effect on July 1, 2026. From July 1 through December 31, 2026, Illinois motor fuel tax rates will remain what they were January 1 to June 30, 2026.

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. 

And on July 2, 2026, the governor extended the gas tax holiday through August 6, 2026.

He later extended the extension through September 5, 2026.

And on September 3, 2026, Governor Braun extended the suspension of gasoline usage tax and gasoline excise tax through October 5, 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. But tax holidays and mid-month rate changes don’t need to create fiscal risk. 

Take control of your fuel tax compliance

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. 

See how Avalara's purpose-built excise platform connects calculation and returns across your enterprise systems. Talk to an excise tax specialist.