(a) There is hereby levied a reduced rate excise tax on compressed natural gas (CNG) and liquefied natural gas (LNG) in an amount of $.08 per GGE or DGE effective October 1, 2018. Effective October 1, 2023, the reduced rate excise tax on compressed natural gas (CNG) and liquefied natural gas (LNG) will increase to $.13 per GGE or DGE. Effective October 1, 2028, the excise tax on compressed natural gas (CNG) will increase to the gasoline excise tax rate as prescribed by subsection (a)(1) of Section 40-17-325 per gasoline gallon equivalent (GGE) and the excise tax on liquefied natural gas (LNG) will increase to the diesel fuel excise tax rate as prescribed by subsection (a)(2) of Section 40-17-325 per diesel gallon equivalent(DGE). Effective October 1, 2028, in the event that an additional gasoline excise tax, which is not referenced in subsection (a)(1) of Section 40-17-325, is levied, the excise tax on compressed natural gas (CNG) will be calculated using the combined gasoline excise tax rates for compressed natural gas (CNG) per gasoline gallon equivalent (GGE). In the event that an additional diesel fuel excise tax, which is not referenced in subsection (a)(2) of Section 40-17-325, is levied, the excise tax on liquefied natural gas (LNG) will be calculated using the combined diesel fuel excise tax rates for liquefied natural gas (LNG) per diesel gallon equivalent (DGE).
(1) Every public seller must collect and pay over to the department an excise tax in an amount equal to the excise tax in effect as prescribed by this subsection per GGE on compressed natural gas or per DGE on liquefied natural gas upon the sale of the compressed natural gas or liquefied natural gas for use in a vehicle designed to be operated on the public roads and highways.
(2) Fleet producers of compressed natural gas or liquefied natural gas shall remit to the department an excise tax in an amount equal to the excise tax in effect as prescribed by this subsection per GGE on compressed natural gas or per DGE on liquefied natural gas withdrawn for use in a vehicle designed to be operated on the public roads and highways.
(b)(1) Personal producers of compressed natural gas who installed a system to compress natural gas, prior to January 1, 2019, that will be used to fuel a motor vehicle must submit an application fee, based upon the number of CNG powered vehicles, to the department no later than January 20, 2019. Beginning January 1, 2019, each personal producer of compressed natural gas must submit an application with the applicable fee per CNG vehicle to the department within 20 calendar days from the completed date of installation of a new system to compress natural gas that will be used to fuel a motor vehicle.
(2) There is hereby levied an annual application fee of one hundred ($100) per vehicle for all personal producers of compressed natural gas in lieu of the excise tax levied in subsection (a). The annual application fee is due January 20 of each calendar year beginning with January 1, 2019, and each calendar year thereafter. If a CNG vehicle is purchased, by the personal producer who has installed a system to compress natural gas, after January 1 in any calendar year, the application fee is due to the department within 20 calendar days following purchase or acquisition of the CNG powered vehicle. If any vehicle is acquired, natural gas system installed, or vehicle put in operation after June 30 the fee shall be one-half the flat fee stated in this section, or after September 30, the fee shall be one-fourth of the flat fee stated in this section. The personal producer must include the vehicle identification number of each vehicle that is powered by compressed natural gas, the purchase date of the CNG vehicle, date of installation of system, and any other documentation the department deems necessary on the annual application. The annual fee shall not apply to a fleet producer. A bond will not be required for a personal producer of compressed natural gas who files the annual application fee. A refund will not be granted to the personal producer if the vehicle is sold during the calendar year. The personal producer is required to notify the department within 20 calendar days if he or she ceases to be a personal producer of compressed natural gas for use in a vehicle.
(3) Failure to submit an application and required fee shall subject the personal producer to a penalty of not greater than five hundred dollars ($500) per vehicle.
(c) If the motor fuel excise tax is collected by the public seller or fleet producer of CNG or LNG or the annual application fee is remitted by the personal producer for compressed natural gas, the compressed natural gas or liquefied natural gas shall not be subject to sales or use tax levied by this state.
Last modified: May 3, 2021