Natural gas has been used as an alternative to gasoline and diesel in Texas’ vehicles for many years, but has always been a fraction of the total transportation fuel market. State excise taxes on natural gas used in cars, trucks and buses is currently administered by a pre-paid decal program based on estimated miles driven and vehicle weight.
Because of the emergence of new production technologies, natural gas is abundant and less expensive than conventional petroleum-based fuels. As a result, natural gas use in transportation, particularly in heavy-duty vehicles as a substitute for diesel, is expanding quickly. The excise tax collection methods need to be adjusted to meet the growing demand for this transportation fuel.
State taxes on natural gas used in the state’s cars, trucks, and buses have been administered under a separate system from the system for collecting state taxes on other types of motor fuels. HB 2148 seeks to align state taxes on the use of natural gas with those applied to gasoline and diesel fuel.
HB 2148 would make certain acts involving compressed of liquefied natural gas open to civil and criminal charges, such as a $25 to $200 civil penalty or a Class B misdemeanor if someone puts natural gas into a fuel tank without a license, or provides gas tax free if it is not tax free. These penalties, however, match those given out for similar offenses relating to other fuels in the chapter.
HB 2148 would bring compressed or liquefied natural gas under the same taxation structure as other motor fuels without raising the rate, which would make the tax system more understandable. It also makes the tax collection method compatible with collection of other fuel taxes.
Since HB 2148 does not add to the taxation of compressed or liquefied natural gas, it does not treat dealers of this fuel differently that dealers of any other fuel regulated by Texas, and it reimburses dealers for their work administering this tax. TPPA supports HB 2148. Click on the link below to read more.