SN 2002(6)

Motor Vehicle Fuels Tax Changes
as of July 1, 2002 and August 1, 2002

Purpose: This Special Notice provides information about the expiration of the exemption from the motor vehicle fuels tax for liquefied petroleum gas (propane) and natural gas.  It also provides information about the increase of the motor vehicle fuels tax rate for diesel fuel, propane, and natural gas.

Effective Date: Effective upon issuance and applicable to diesel fuel inventory as of the close of business on July 31, 2002 (or at 11:59 p.m. of that date)

Statutory Authority: Conn. Gen. Stat. §12-458(a)(2)(C), as amended by 2002 Conn. Pub Acts 1, §71 (May 9 Spec. Sess.); Conn. Gen. Stat. §12-458f; and Conn. Agencies Regs. §12-455a-1.

Expiration of Tax Exemption for Propane and Natural Gas: Effective July 1, 2002, the motor vehicle fuels tax exemption in Conn. Gen. Stat. §12-458f for “compressed natural gas, liquefied petroleum gas [propane] and liquefied natural gas” has expired. Therefore, as of this date, propane and natural gas are subject to the motor vehicle fuels tax. 

From July 1, 2002 through July 31, 2002, propane and natural gas (compressed or liquefied) suitable for the generation of power to propel motor vehicles are taxable at the rate of 18¢ per gallon, under Conn. Gen. Stat. §12-458(a)(2)(C), which currently imposes tax on “diesel fuel, propane or natural gas sold or used in this state” at that rate. Effective August 1, 2002, propane and natural gas will be taxed at the rate of 26¢ per gallon.

To calculate the gallon equivalents of fuels in gaseous form, see Conn. Agencies Regs. §12-455a-1, Computation of tax on motor vehicle fuels in gaseous form.

Tax Rate Increase: Effective August 1, 2002, the motor vehicle fuels tax rate on the sale or use of diesel fuel, propane, and natural gas will increase from 18¢ to 26¢ per gallon.

No Change in Gasoline or Gasohol Tax Rates:  The motor vehicle fuels tax rates on gasoline and gasohol will not change on August 1, 2002.  The tax rate for gasoline will remain 25¢ per gallon, and the tax rate for gasohol will remain 24¢ per gallon.

Revised Tax Returns: Motor vehicle fuels tax returns that reflect the rate changes will be mailed to all distributors.

Effect on Other Documents: None affected.

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 an informal interpretation of Connecticut tax law by DRS and may be referred to for general guidance by taxpayers or tax practitioners.

For Further Information on Motor Vehicle Fuels Tax: Call the Excise/Public Services Taxes Subdivision at 860-541-3225 during business hours, Monday through Friday.

For Further Information: Please call DRS during business hours, Monday through Friday:

• 1-800-382-9463(toll-free within Connecticut), or
• 860-297-5962(from anywhere)

TTY, TDD, and Text Telephone users only may transmit inquiries 24 hours a day by calling 860-297-4911.