Tax exemption for natural gas powered vehicles.

13LSO-0296.L3

FISCAL NOTE

The fiscal impact, in the form of decreased sales and use taxes, is indeterminable.

The Department of Revenue assumes that this exemption would apply to vehicles that operate in whole or in part on compressed natural gas (CNG). The revenue decrease from sales of CNG vehicles would be dependent on the number of CNG vehicles sold.  The Department of Revenue would assume the market for these vehicles would depend heavily on the construction of enough CNG filling stations throughout the state to make vehicles of this type a viable alternative to gasoline and diesel powered vehicles.  Based on the $6,000 threshold established in the bill, there would be $322.80 of sales tax exempted on the sale of each qualifying vehicle, based on an average rate of 5.38 percent.

This exemption is repealed effective June 30, 2017.

Prepared by:   Dean Temte, LSO  Phone: 777-7881

(Information provided by Dan Noble, Dept. of Revenue; 777-5220)