Tuesday, February 23, 2016
According to today's Legislative Alert from the National Propane Gas Association (NPGA), there is a new calculation that claimants must complete to account for the energy content disparity between propane and gasoline on the revised Form 720. That calculation, or the gasoline gallon equivalent (GGE), means that every 1.353 gallons of propane are taxed at $0.183-per-gallon. Simply stated, the excise tax rate on propane is $0.135-per-gallon, resulting in a 26 percent reduction from the previous rate. 
The excise tax equalization, which became law last year, applies to fuel sold on or after January 1, 2016. According to the IRS's calculations, propane has approximately 74 percent of the energy content of gasoline. It is important to note that this is the new permanent rate for propane autogas.
The new calculation for the Alternative Fuel Tax Credit was released earlier this year, and has been modified for energy content for 2016. The calculation for the credit is $0.50 for every 1.353 gallons of propane. On a per gallon basis, propane is eligible for approximately $0.37-per-gallon.
The new Form 720 can be found at http://1.usa.gov/1Qebqv7.
The excise tax equalization, which became law last year, applies to fuel sold on or after January 1, 2016. According to the IRS's calculations, propane has approximately 74 percent of the energy content of gasoline. It is important to note that this is the new permanent rate for propane autogas.
The new calculation for the Alternative Fuel Tax Credit was released earlier this year, and has been modified for energy content for 2016. The calculation for the credit is $0.50 for every 1.353 gallons of propane. On a per gallon basis, propane is eligible for approximately $0.37-per-gallon.
The new Form 720 can be found at http://1.usa.gov/1Qebqv7.
