U.S. Representatives Introduce Alternative Fuel Tax Parity Act

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U.S. Reps. Todd Young (R-Ind.), John Larson (D-Conn.), Mac Thornberry (R-Texas), and Ron Kind (D-Wis.) have introduced the Alternative Fuel Tax Parity Act, H.R. 1665, legislation aimed at ensuring that excise taxes on LNG and propane for highway use are levied at a rate consistent with their energy output relative to diesel and gasoline, respec­tively.

Highway use LNG produces 58% of the energy output of diesel, but is taxed at the same 24.3 cents per gallon rate. Similarly, propane produces 72% of the energy output of gasoline, but is taxed at the same 18.3 cents per gallon. The Alternative Fuel Tax Parity Act recognizes these disparities and sets energy equivalent rates for LNG at 14.1 cents a gallon and propane at 13.2 cents a gallon.

“As we see more and more alternative fuel ser­vice stations popping up around my district and the country, it’s important that we ensure inequitable tax rates don’t discourage consumers from adopting alter­native fuel vehicles,” said Young. “This bill is an easy way to ensure a level playing field for this burgeoning sector of our economy.”

“This bill adds a fair, market-centered solution to fix the tax disparity between diesel and LNG,” said Thornberry. “I think this change will encourage more private sector investment in LNG infrastructure and production, and that will have a real, positive impact on our economy.” Added Kind, “Alternative fuel sources are an important part of the comprehensive energy policy our country needs to end our depen­dence on foreign oil. The tax code shouldn’t pick winners and losers. This legislation would ensure that cleaner-burning fuels like propane and natural gas are treated the same as other energy options.”

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