Provides for equivalency of the special fuels tax with the gasoline tax on motor vehicles that operate on the highways using liquefied natural gas, liquefied petroleum gas, or compressed natural gas. (7/1/15) (EN +$6,000,000 SD RV See Note)
Impact
The implications of SB271 are significant for businesses and individuals engaged in the sale and use of these fuel types. By imposing taxes on previously exempt users, it affects operational costs and pricing strategies. The licensing requirements for dealers and users of special fuels introduce higher regulatory oversight to ensure compliance with tax obligations, potentially increasing administrative burdens. However, the state stands to gain a substantial revenue boost, estimated at an additional $6 million from the new taxes, which can be utilized for various public investments.
Summary
SB271 provides for the taxation of special fuels used in motor vehicles, specifically targeting compress natural gas, liquefied natural gas, and liquefied petroleum gas. The bill sets the tax rate at 16 cents per gallon, which will apply uniformly starting January 1, 2016. The proposal removes previous exemptions that allowed certain users not to pay this tax, thereby broadening the taxpayer base and augmenting state revenue from these fuel types. The legislation thus aims to create a level playing field among fuel types and contribute to state funds with projected increases in fiscal resources for infrastructure and public services.
Sentiment
The sentiment surrounding SB271 appears generally favorable among legislators, particularly those advocating for increased state revenue and equitable taxation of fuel types. However, there may be contention from users and dealers who benefited from exemptions previously, as they express concerns over the impact of increased operational costs on their businesses. The discourse indicates a recognition of the need for funding state services while balancing the need to avoid burdensome regulations that could stifle industry growth.
Contention
Notably, the bill has raised points of contention regarding the potential impact on small businesses specializing in the sale of compressed natural gas and other alternative fuels. Critics argue that the removal of tax exceptions could disincentivize the use of cleaner energy options and pose financial strains on businesses adjusting to the new tax responsibilities. Proponents, however, assert that implementing a fair tax system is crucial for state infrastructure funding and environmental initiatives related to alternative fuels.
Adjusts the amount of excise tax levied on gasoline, diesel, and special fuels and levies new taxes on gasoline, diesel, special fuels, and electric and hybrid vehicles (EG INCREASE SD RV See Note)
Relating to the repeal of the motor fuel taxes on compressed natural gas and liquefied natural gas and the exemption from sales and use taxes of natural gas used as a motor fuel.
Increases the per gallon excise tax on gasoline, diesel, and certain special fuels and levies an excise tax on electric and hybrid vehicles (OR -$305,000,000 GF RV See Note)
Creates an additional tax on motor fuels and requires the tax on gasoline, diesel fuels, and special fuels to be adjusted annually in accordance with the Consumer Price Index (EG +$551,600,000 SD RV See Note)