Propane Vehicle Council: Congress Repeals Clean Fuels Tax Penalty
8 August 1997
Propane Vehicle Council: Congress Repeals Clean Fuels Tax Penalty
WASHINGTON, Aug. 8 -- The Propane Vehicle Council of
Washington, D.C. announced today the inclusion in the "Taxpayer Relief Act of
1997" of a provision providing propane and other alternative motor fuels
including liquified natural gas and methanol, federal excise tax parity with
gasoline. Under this provision, the effective rate of the federal excise tax
on these fuels will now be the same as the rate on gasoline.
This change in the tax laws affecting alternative fuels was sponsored by
Sen. Don Nickles (R-Okla.) and Rep. John Ensign (R-Nev.). The provision was
hailed by Council Chairman, Jim Ferrell, Chairman and Chief Executive Officer
of Ferrellgas of Liberty, Mo., one of the nation's largest propane marketers.
"Both Congress and the President have long recognized the important role that
alternative transportation fuels can play in reducing oil imports, improving
air quality, and providing domestic jobs. But the tax code has been a major
impediment to the widespread use of these fuels. This provision is a major
breakthrough that should spur renewed public interest in these fuels."
The Propane Vehicle Council is a Washington, D.C.-based national trade
association founded in 1994 to advance propane's future as a clean, safe, and
superior-performing alternative transportation fuel. The Council's membership
includes propane marketers, propane producers and pipeline operators,
equipment manufacturers and distributors, and vehicle and engine
manufacturers.
"Motor fuels have historically been taxed on a gallonage basis without
regard to the energy content of the fuel," explained Joe Colaneri, the
Council's Executive Director. "When corrected to a common energy content, the
tax on alternative fuels has varied widely and in most instances has been in
excess of the rate imposed on gasoline. Because it takes more propane to
travel the same distance, propane has been particularly disadvantaged, taxed
at an effective rate of 24.9 cents per gallon, when corrected to a common fuel
energy content, compared with the 18.3 cents per gallon tax on gasoline,"
Colaneri continued. Under the new tax change, the federal excise tax on
propane will now be 13.6 cents per gallon effective Oct. 1, 1997.
"The Council's position from the beginning has been that Congress never
intended to discourage the use of any one alternative fuel nor place it at a
competitive disadvantage," Colaneri continued. "No consumer should be
penalized because he or she elected to use a safe, clean, domestically
produced alternative vehicle fuel. We are therefore gratified that good tax
policy has at last prevailed in this matter and that congressional intent to
encourage the use of alternative fuels will now be consistently and
effectively implemented."
Colaneri added, "This is welcome news to the operators of more than
300,000 propane vehicles in the U.S. and is particularly timely in supporting
new propane offerings from Ford, General Motors, and Cummins Engine Company."
SOURCE Propane Vehicle Council
