Connecticut State Department of Revenue Services

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SN 94(6)

Motor Vehicle Fuels Tax Changes

This publication has been clarified by SN 95(13)

PURPOSE: This Special Notice provides information concerning the rates of motor vehicle fuels tax on gasoline, gasohol, natural gas, propane (liquified petroleum gas) and diesel.

BACKGROUND: Since its June 1991 Special Session, the Connecticut General Assembly enacted two laws that will increase the motor vehicle fuels tax on gasoline, gasohol and natural gas in 1 cent or 2 cents per gallon increments on each of 14 different occasions, the first of which was September 1, 1991 and the last of which is January 1, 1997.

EFFECTIVE DATE: Effective upon issuance and applicable to the sale or use of gasoline, gasohol, natural gas, and propane (liquified petroleum gas) on or after July 1, 1994.

STATUTORY AUTHORITY: Conn. Gen. Stat. §12-458(a), as amended by 1993 Conn. Pub. Acts 74, §34 and by 1993 Conn. Pub. Acts 93, and 1994 Conn. Pub. Acts 170, §3, and 1994 Conn. Pub. Acts 4, §21 (May Spec. Sess.).

REPEAL OF TAX ON CERTAIN SALES OR USES OF COMPRESSED NATURAL GAS, LIQUIFIED PETROLEUM GAS AND LIQUIFIED NATURAL GAS: Effective July 1, 1994 and until July 1, 1999, sales of compressed natural gas, propane (liquified petroleum gas) and liquified natural gas shall not be subject to the motor vehicle fuels tax, provided such fuel is sold to a covered fleet for use in a covered fleet vehicle, as defined in 241 of the federal Clean Air Act, 42 U.S.C. §7581.

"Covered Fleet:" 42 U.S.C. §7581(5) defines the term "covered fleet" as:

10 or more motor vehicles which are owned or operated by a single person. In determining the number of vehicles owned or operated by a single person for purposes of this paragraph, all motor vehicles owned or operated, leased or otherwise controlled by such person, by any person who controls such person, by any person controlled by such person, and by any person under common control with such person shall be treated as owned by such person. The term "covered fleet" shall not include motor vehicles held for lease or rental to the general public, motor vehicles held for sale by motor vehicle dealers (including demonstration vehicles), motor vehicles used for motor vehicle manufacturer product evaluations or tests, law enforcement and other emergency vehicles, or nonroad vehicles (including farm and construction vehicles).

"Covered Fleet Vehicle:" 42 U.S.C. §7581(6) defines the term "covered fleet vehicle" as:

only a motor vehicle which is (i) in a vehicle class for which standards are applicable under this part [Part C (Clean Fuel Vehicles) of Chapter 85, Subchapter II (Emission Standards for Moving Sources)]; and (ii) in a covered fleet which is centrally fueled (or capable of being centrally fueled). No vehicle which under normal operations is garaged at a personal residence at night shall be considered to be a vehicle which is capable of being centrally fueled within the meaning of this paragraph.

TAX RATE INCREASE: Effective July 1, 1994, the motor vehicle fuels tax rate on the sale or use of:

  • gasoline will increase from 30 cents to 31 cents per gallon.
  • gasohol will increase from 29 cents to 30 cents per gallon.
  • natural gas (gaseous form, not sold to a covered fleet for use in a covered fleet vehicle) from 30 cents to 31 cents per 82.62 cubic feet (at 14.73 lbs. of pressure per square inch, 60 degrees Fahrenheit). For further information, see PS 92(10.1).

PROPANE AND DIESEL FUEL: The motor vehicle fuels tax rate on propane (unless sold to a covered fleet for use in a covered fleet vehicle) and diesel fuel will remain at 18 cents per gallon and will not increase on July 1, 1994.

REVISED TAX RETURNS: All distributors will be mailed revised tax returns that reflect these rate changes.

NEW EXEMPTION FOR RAILROAD OWNERS AND OPERATORS: Effective June 9, 1994, any person who owns or operates a vehicle which runs only upon rails or tracks which is properly registered with the federal government, in accordance with the provisions of 26 U.S.C. §4222, shall be exempt from the motor vehicle fuels tax for fuels used in such vehicle.

EFFECT OF THIS DOCUMENT: A Special Notice is a document that announces a new policy or practice in response to changes in State or federal laws or regulations or to judicial decisions. A Special Notice indicates the Department's informal interpretation of Connecticut tax law and may be referred to for general guidance by taxpayers or tax practitioners. 

SN 94(6)
Motor vehicle fuels tax
Issued: 6/23/94