Indiana Laws and Incentives
Listed below are the summaries of all current Indiana laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:
Indiana's National Electric Vehicle Infrastructure (NEVI) Planning
The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the Indiana Department of Transportation (INDOT) to submit an EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office by August 1, 2022, describing how the state intends to distribute NEVI funds. Plans must be established according to NEVI guidance.
For more information about Indiana’s NEVI planning process, see the INDOT Electric Vehicle Charging Infrastructure Network website. For more information about Indiana’s NEVI plan, see the Joint Office’s State Plans for EV Charging website.
Medium- and Heavy-Duty Grant Program
The Indiana Department of Environmental Management (IDEM) allocates a portion of the Volkswagen (VW) Environmental Mitigation Trust funds for the replacement or repower of eligible on- and off-road vehicles and equipment. Eligible on-road vehicles and equipment include Class 4-8 trucks and Class 4-8 school, shuttle, and public transit buses. Eligible off-road vehicles and equipment include airport ground support equipment, ferries, forklifts, port cargo handling equipment, and freight-switcher locomotives. All vehicles and equipment must be certified or verified by the U.S. Environmental Protection Agency or the California Air Resources Board. Applicants proposing alternative fuel equipment or vehicle projects must identify the availability of fueling infrastructure. Additional terms and conditions apply. For more information, including current requests for proposals, see the IDEM Indiana VW Mitigation Trust Program website.
Compressed Natural Gas (CNG) Tax Credit
A carrier operating a commercial CNG vehicle on any Indiana highway may claim a credit equal to 12% of the road taxes imposed on its CNG consumption in the previous calendar quarter. The credit is refundable. (Reference Indiana Code 6-6-4.1-1 and 6-6-12)
Diesel Vehicle Retrofit and Improvement Grants
The Indiana Department of Environmental Management (IDEM) administers the DieselWise Indiana grant programs to support projects that reduce diesel emissions. DieselWise provides grants ranging from $50,000 to $1,000,000 for projects throughout the state. Eligible applicants include private and public entities that operate diesel powered equipment. Eligible projects include replacing or converting a diesel vehicle or vehicle component with one that operates on alternative fuel, as well as installing exhaust retrofit technologies, idle reduction technologies, aerodynamic technologies, and low rolling resistance tires. For more information see the IDEM DieselWise website.
Vehicle Research and Development Grants
The Indiana 21st Century Research and Technology Fund provides grants and loans to support economic development in high technology industry clusters. Incentives are available for qualified alternative fuel technologies and fuel-efficient vehicle development and production. For more information, see the Indiana Venture Development website. (Reference Indiana Code 5-28-16-2)
Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption
Any motor vehicle equipped with an auxiliary power unit or other idle reduction technology may exceed the gross, single axle, tandem axle, or bridge formula weight limits by up to 400 pounds (lbs.) to compensate for the added weight of the idle reduction technology. Any NGV may exceed the limits by up to 2,000 lbs. (Reference Indiana Code 9-20-4-1)
Biodiesel Price Preference
A governmental body, state educational institution, or instrumentality of the state that performs essential governmental functions on a statewide or local basis is entitled to a 10% price preference for the purchase of fuels containing at least 20% biodiesel (B20) by volume or fuels that are primarily ester-derived (other than alcohol) made from biological materials, such as oilseeds and animal fats, for use in operating compression and ignition engines. (Reference Indiana Code 5-22-15-19)
Special Fuel Tax Exemption
The sale of biodiesel, blended biodiesel, and natural gas used to power an internal combustion engine or motor is exempt from state gross retail tax. (Reference Indiana Code 6-2.5-5-51 and 6-6-2.5-22)
Biodiesel Blend Tax Exemption
Biodiesel blends of at least 20% (B20) that are used for personal, noncommercial use by the individual that produced the biodiesel portion of the fuel are exempt from the special fuel license tax. The maximum number of gallons of fuel for which the exemption may be claimed is based on the percentage volume of biodiesel in each gallon used. For more information, see the Indiana Department of Revenue Fuel Tax Forms website. (Reference Indiana Code 6-6-2.5-1.5, 6-6-2.5-28, and 6-6-2.5-30.5)
Alternative Fuel Vehicle (AFV) Inspection and Maintenance Exemption
Dedicated AFVs are exempt from inspection and maintenance requirements if they operate exclusively on natural gas, propane, ethanol, hydrogen, or methanol. (Reference 326 Indiana Administrative Code 13-1.1)
Propane Equipment and Infrastructure Liability Exemption
Propane equipment, infrastructure, and fuel providers are exempt from civil liability for personal injury or property damage resulting from an individual who modifies, repairs, materially alters, or uses propane equipment or fuel for purposes not intended by the manufacturer or fuel producer. (Reference Indiana Code 34-31-11.2-2)
Electric Vehicle (EV) Time-Of-Use (TOU) Rate - Indiana Michigan Power
Indiana Michigan Power offers a TOU rate to residential customers who own a qualified EV. Indiana Michigan Power may require customers to install a metering system that is capable of separately tracking EV charging. For more information, see the Indiana Michigan Power Rates and Tariffs website.
Electric Vehicle (EV) Charging Station Rebate - Indiana Michigan Power
Indiana Michigan Power offers commercial, fleet, and multi-unit dwelling customers a rebate of $250 per Level 2 EV charging station port installed or five years’ worth of revenue credits to apply against construction costs of new business facilities to serve newly installed EV charging stations. Incentives are available on a first-come, first-served basis. For more information, see the Indiana Michigan Power Charge at Work in Indiana website.
Commercial Electric Vehicle (EV) Charging Station Rebate - Duke Energy
Duke Energy offers rebates of up to $500 to commercial customers for the installation of Level 2 EV charging stations at workplaces, multi-unit dwellings, fleets, or publicly available locations. For more information, including application requirements and rebate amounts, see the Duke Energy Commercial Charger Rebate website.
Electric Vehicle (EV) Charging Station Rental Program – Duke Energy
Duke Energy allows residential and commercial customers to rent Level 2 and direct current fast charging (DCFC) stations for a flat rate each month. For more information, see the Duke Energy EV Programs website.
Electric Vehicle (EV) Time-Of-Use (TOU) Rates - Applied Energy Services (AES) Indiana
AES Indiana offers a TOU rate to residential and business customers who own a licensed EV. Customers who are considering purchasing Level 2 electric vehicle supply equipment should contact AES Indiana to discuss the benefits and requirements of participating in the program. Only customers in AES territory are eligible. Restrictions apply. For more information, see the AES Indiana Electric Vehicles website.
Point of Contact
Electric Vehicle Program Manager
Electric Vehicle (EV) Charging Station Rebate – Applied Energy Services (AES) Indiana
AES Indiana offers residential customers a $250 rebate for the purchase of a new Level 2 EV charging station. Customers must enroll in a managed charging program. For more information, including a list of eligible EV charging stations, see the AES Indiana EV Managed Charging Program website.
Point of Contact
Electric Vehicle Program Manager
Electric Vehicle (EV) Infrastructure Support
Indiana utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.
Laws and Regulations
Lake Michigan Electric Vehicle (EV) Circuit
Indiana joined Michigan, Illinois, and Wisconsin (Signatory States) in signing the Lake Michigan EV Circuit Tour memorandum of understanding (MOU) to create an EV charging corridor along the Lake Michigan coastline that is intended to make it possible to seamlessly drive an EV across the Signatory States’ that border Lake Michigan. Signatory States are committed to:
- Coordinating on regional EV charging infrastructure siting and deployment strategies;
- Achieving a consistent EV charging station user experience across Signatory States;
- Encouraging EV tourism around Lake Michigan;
- Removing barriers to EV adoption and reducing range anxiety;
- Identifying and developing best practices for EV charging, infrastructure optimization, information sharing, and electricity demand management;
- Providing reliable long-distance driving routes for EV drivers.
The Signatory States will maintain a working group composed of senior leadership from each state who will meet and report on the above actions. For more information, see the MOU.
Utility Electric Vehicle (EV) Charging Station Pilot Program Authorization
Electric utilities may request approval from the Indiana Utility Regulatory Commission to implement a pilot program to evaluate the feasibility and design of large-scale EV charging station deployment to support public-use electric vehicle (EV) adoption. Public-use EVs include electric school buses, electric transit buses, and EVs used to deliver goods and services to the public. Eligible pilot program proposals include those that:
- Install, own, or operate EV charging stations or make-ready EV charging stations for public-use EVs; and,
- Provide incentives or rebates to customers to encourage the purchase of EVs and installation of EV charging stations.
Utilities must also include plans to install EV charging stations in underserved and diverse communities.
(Reference House Bill 1221, 2022)
Public Utility Definition
A person or joint agency that owns, operates, or leases electric vehicle supply equipment for use by the public is not defined as a public utility. (Reference House Bill 1221, 2022)
Regional Electric Vehicle (REV) Midwest Plan
Indiana joined Illinois, Michigan, Minnesota, and Wisconsin (Signatory States) in signing the REV Midwest memorandum of understanding (MOU) to accelerate vehicle electrification in the Midwest. Signatory States are committed to:
- Accelerate medium- and heavy-duty fleet electrification;
- Collaborate on regional electric vehicle (EV) charging station siting and deployment analyses with a focus on commercial routes;
- Standardize regulations, messaging, and customer experience related to electric vehicles (EVs) across state lines;
- Evaluate opportunities for workforce development;
- Identify historically underserved communities for equitable EV charging station development and EV adoption; and,
- Educate consumers and fleet owners to raise EV awareness, reduce range anxiety, and increase EV adoption.
The Signatory States maintain a coordination group composed of senior leadership from each state who meet and report on the above actions. For more information, see the REV Midwest Partnership Announcement.
Electric Vehicle (EV) Production Support
The Electric Vehicle Commission (Commission) is established to assess the EV market and labor force in Indiana. The Commission must:
- Evaluate EV production facilities and capabilities;
- Take inventory of skilled and non-skilled workers, training needs, and opportunities in the EV industry;
- Identify and leverage manufacturing competencies within the automotive industry to increase EV production; and,
- Identify opportunities for EV related research and development industry.
Electric Drive Vehicle Registration Fee
Electric vehicle owners are required to pay an additional registration fee of $150, and plug-in hybrid and hybrid electric vehicles are required to pay an additional registration fee of $50. The Indiana Bureau of Motor Vehicles will determine new fee amounts every five years. (Reference Indiana Code 9-18.1-5-12)
Special Fuel License Tax
Certain special fuels sold or used to propel motor vehicles are subject to a license tax. Liquefied natural gas is subject to a tax per diesel gallon equivalent. Compressed natural gas, butane, and propane are subject to a tax per gasoline gallon equivalent. From July 1, 2018, through July 1, 2024, the tax rate will be determined each year based on the special fuel tax index factor. The tax does not apply to nominal biodiesel blends of at least 20% (B20); special fuel used only for a personal, noncommercial use and not for resale; and biodiesel used by a biodiesel producer holding an exemption certificate. Other exemptions apply. For the current tax rate and more information, see the Indiana Miscellaneous Tax Rates website. (Reference Indiana Code 6-6-2.5 and 6-6-1.6)
Special Fuel Motor Carrier Fuel Tax
A person who operates a commercial motor vehicle on any highway in Indiana is subject to a surcharge tax on the consumption of motor fuel. From July 1, 2018, through July 1, 2024, the tax rate will be determined each year based on the special fuel tax index factor. For the current tax rates and more information, see the Indiana Miscellaneous Tax Rates website. (Reference Indiana Code 6-6-4.1 and 6-6-1.6)
Alternative Fuel and Special Fuel Inventory Tax
Owners of fuel that have title to a fuel storage tank containing propane, biodiesel, blended biodiesel, or natural gas for sale to a motor carrier for highway use in Indiana are subject to an inventory tax. The tax rate is based on the number of gallons of fuel in storage at the close of business on the inventory date, minus the amount of fuel that is below the mouth of the draw pipe. To account for the fuel that will not be pumped, a fuel owner may deduct 200 gallons from the fuel inventory for a fuel storage tank with a capacity of less than 10,000 gallons, and 400 gallons for a fuel storage tank with a capacity of over 10,000 gallons. (Reference Indiana Code 6-6-4.1 and 6-6-2.5-29)
Propane Vehicle Decals
An individual may place propane into the fuel tank of a motor vehicle only if the vehicle has a valid alternative fuel decal affixed to the front windshield or the individual has applied for a decal within the last 30 days. The cost of the decal varies according to vehicle type and the gross vehicle weight rating. The annual fee may be prorated if the vehicle is newly purchased, registered in Indiana, or converted to operate using an alternative fuel. For propane vehicles registered outside of Indiana, owners must purchase a temporary trip permit from a licensed propane dealer. For more information, see the Indiana Department of Revenue Fuel Tax Forms website. (Reference Indiana Code 6-6-14 and 6-6-2.5-67)
Point of Contact
Special Tax Division
Indiana Department of Revenue
Phone: (317) 615-2630
Alternative Fuel and Special Fuel Definitions
The definition of alternative fuel includes propane. Special fuel is defined as all combustible gases and liquids that are suitable for powering an internal combustion engine or motor or are used exclusively for heating, industrial, or farm purposes. Special fuels include biodiesel, blended biodiesel, and natural gas products, including liquefied and compressed natural gas. (Reference Indiana Code 6-6-2.5-1 and 6-6-2.5-22)
Vehicle Idling Policy Requirements
Schools must adopt and enforce a written policy to address idling vehicles on school grounds. This policy must be modeled after the Indiana State Department of Health's manual of best practices for managing indoor air quality in schools and must be available for review. (Reference 410 Indiana Administrative Code 33-4-3)
Clean Vehicle Acquisition Requirements
Each state entity must purchase or lease a clean energy vehicle, unless the Indiana Department of Administration (Department) determines that the purchase or lease of the vehicle is inappropriate for its intended use, or the purchase or lease would cost 20% more than a comparable non-clean energy vehicle. Additional exemptions apply. A clean energy vehicle is defined as a vehicle that operates on one or more alternative energy sources, including a rechargeable energy storage system, electricity, ethanol, biodiesel, hydrogen, natural gas, and propane. Each state entity must annually submit to the Department information regarding its use of clean energy vehicles. (Reference Indiana Code 5-22-5-8.5)
Immunity for Misuse of E85
E85 sellers, suppliers, distributors, manufacturers, and refiners are immune from civil liability for personal injury or property damage resulting from a person fueling any vehicle with E85 that is not a flexible fuel vehicle. This includes any vehicle equipped to operate when fueled entirely with E85. This immunity does not apply if an E85 seller, supplier, distributor, manufacturer, or refiner does not display all E85 warning signs that federal or state laws require. (Reference Indiana Code 34-30-24)
E85 Promotion and Education
The Indiana State Department of Agriculture must work with automobile manufacturers to improve awareness and labeling of E85 and must coordinate with the appropriate companies to include E85 fueling stations in updates of global positioning navigation software. (Reference Indiana Code 15-11-2-4)
Electric Vehicle (EV) Deployment Impact Assessment
The Indiana 21st Century Energy Policy Development Taskforce (Taskforce) explores the impacts that fuel transitions and emerging technologies have on the Indiana electric grid. The Taskforce must, among other things, evaluate the impact of EV deployment on the electric grid capacity and reliability as well as EV charging station ownership and responsibility. The Taskforce published a report of their findings and recommendations in October 2022.
(Reference Indiana Code 2-5-45.1)
Biodiesel is defined as a renewable, biodegradable fuel derived from agricultural plant oils or animal fats that meet ASTM specification D6751. Blended biodiesel is a blend of biodiesel with petroleum diesel fuel so that the volume percentage of biodiesel in the blend is at least 2% (B2). (Reference Indiana Code 6-6-2.5-1.5)
Biofuels Blend Use Requirement
Whenever possible, governmental entities and state educational institutions must fuel diesel vehicles with biodiesel blends containing at least 2% biodiesel (B2), gasoline vehicles with mid-level ethanol blends between 20% and 73%, and flexible fuel vehicles with E85. This requirement does not apply if such blends are prohibited under federal regulations or have not been approved by the vehicle manufacturer. Additional exemptions apply. (Reference Indiana Code 5-22-5-8, and 21-31-9-3)
Low-Speed Vehicle Access to Roadways
A low-speed vehicle is defined as a four-wheeled electric vehicle capable of achieving a speed of up to 35 miles per hour (mph) that meets the standards in Title 49 of the U.S. Code of Federal Regulations, section 571.500. An individual may not operate a low-speed vehicle on a highway that has a posted speed limit greater than 35 mph. (Reference Indiana Code 9-21-5-8.5 and 9-13-2-94.5)
Certified Technology Park Designation
The Indiana Economic Development Corporation (IDEC) may designate an area as a certified technology park if certain criteria are met, including a commitment from at least one business engaged in a high technology activity that creates a significant number of jobs. The establishment of high technology activities and public facilities within a technology park serves a public purpose and benefits the public's general welfare by encouraging investment, job creation and retention, and economic growth and diversity. High technology activities include advanced vehicles technology, which is any technology that involves electric vehicles, hybrid electric vehicles, or alternative fuel vehicles, or components used in the construction of these vehicles. For more information, see the IEDC Indiana Certified Technology Parks website. (Reference Indiana Code 36-7-32)