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Compressed Natural Gas (CNG)/Liquefied Natural Gas (LNG)

Tax Types >
  • Compressed Natural Gas (CNG)/Liquefied Natural Gas (LNG)

Resources

Authority

Sections 40-17-168 through 40-17-168.19, Code of Alabama 1975.

Effective October 1, 2018, all public sellers and fleet producers of CNG/LNG are required to collect and remit a per gasoline gallon equivalent (GGE) excise tax on CNG and a per diesel gallon equivalent (DGE) excise tax on LNG based upon product sold or disbursed for use in a vehicle designed to be operated on the public roads and highways.

Effective January 1, 2019, all personal producers of CNG must submit an annual application fee by January 20 each year based upon the date of purchase of the CNG powered vehicle(s) or the date of conversion of a vehicle to a CNG powered vehicle. The amount of the fee due is based upon the date of purchase of the vehicle or the date of conversion/installation and is as follows:

  • $100 January 1 – June 30 (Rate for full year)
  • $50 July 1 – September 30 (Reduced rate only for the first year of purchase)
  • $25 October 1 – December 31 (Reduced rate only for the first year of purchase)

$.08 per gasoline gallon equivalent (GGE) excise tax on CNG and an $.08 per diesel gallon equivalent (DGE) excise tax on LNG – effective October 1, 2018.

Effective October 1, 2023, the rate will increase to $.13 per GGE or DGE.

Effective October 1, 2028, the rate on CNG will increase to the combined gasoline excise tax rates as prescribed by Section 40-17-168.2, Code of Alabama 1975, per GGE and the rate on LNG will increase to the combined diesel fuel excise tax rates as prescribed by Section 40-17-168.2, Code of Alabama 1975, per DGE.

EXEMPTION

A licensed public seller or licensed fleet producer may deduct the number of gallons of CNG or LNG sold or disbursed to the entities listed below provided that the exempt entity has a valid exempt entity license issued in accordance with Section 40-17-332(j).

  1. The United States Government or any agency thereof.
  2. County governing body in this state.
  3. Governing body of any incorporated municipality in this state.
  4. City and county boards of education in this state.
  5. Alabama Institute for Deaf and Blind, Department of Youth Services school district, and private and church school systems as defined in Section 16-28- 1, which offer essentially the same curriculum as offered in grades K -12 in the public schools of this state.

Net collections distributed to Department of Transportation.