FISCAL NOTE
The fiscal impact, in the
form of decreased sales and use tax revenues, is indeterminable.
The Department of Revenue
makes the following assumptions regarding this exemption:
- This exemption would apply
to the sale or purchase of equipment that dispenses compressed natural gas
(CNG), and the revenue decrease from the sale of CNG dispensing equipment
would be dependent on the number of CNG refueling stations installed.
- Future construction of CNG
dispensing stations would be dependent on the number of CNG vehicles sold,
and the number of vehicles converted to CNG.
- Existing service stations
would add CNG dispensers to their existing fueling station which would
minimize build out costs.
- Based on information
provided by Chesapeake Energy Corp., the installed cost of a two-sided CNG
dispenser with an industrial flow compressor and related equipment would
cost approximately $750,000 per unit installed.
- Assuming that 90 percent of
the installed cost is equipment, the total equipment cost of one CNG
dispenser is $675,000. Based on a statewide average sales tax rate of 5.38
percent, the estimated revenue decrease for each dispenser unit installed
is $36,315. It is assumed that 47 percent of the decrease would be
allocated to local governments with 53 percent of the decrease impacting the
General Fund.
- There are currently four new
CNG refueling stations in the planning stage.
This exemption is repealed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)