ARKANSAS AGENCY PROPOSES TAXATION RULES FOR LNG MOTOR FUEL

On April 16, Arkansas’ Department of Finance and Administration proposed procedures for taxing LNG when used as a motor fuel. Currently, the state does not impose any tax on LNG since alternative fuels are not taxed until a certain number of them are registered in the state. If finalized, the rules will go into effect September 1, 2014 and likely impose tax of 5 cents per gasoline gallon equivalent (GGE) of LNG. The tax rate for alternative fuels starts at 5 cents for the first 999 vehicles registered and then goes to 8.5 cents for the next 500 vehicles, and gradually goes up from there as more vehicles are registered. The proposal would define a GGE of LNG to be 5.37 pounds of natural gas for purposes of the tax. The rules also would define a DGE of LNG to be 6.06 pounds of natural gas but would still impose the tax based on a GGE of LNG. There will be a public hearing on May 14, 2014 at 1:00 p.m. in the second floor conference room (#2330) of the Ledbetter Building, 1816 W. 7th Street, Little Rock, Arkansas 72201. Interested parties may attend and present their views on the subjects and issues involved. Written comments may be mailed to John Theis, Assistant Commissioner of Revenue, Policy and Legal, Department of Finance and Administration, P. O. Box 1272, Ledbetter Building Room 2440, Little Rock, Arkansas 72203-1272, or by fax to 501.683.1161.