Senate Finance Committee Passes Tax Extender Legislation and Corrects LNG Tax Inequity
The U.S. Senate Finance Committee this week approved an original bill to extend certain expiring tax provisions, including the credits for alternative fuel and infrastructure. The legislation, which passed the Finance Committee by a vote of 23 to 3, extends the 50 cent per gallon credit for natural gas when used as a transportation fuel and the 30 percent/$30,000 investment tax credit for natural gas infrastructure effective from Jan. 1, 2015 through Dec. 31, 2016.
In addition, the legislation includes an amendment offered by Sens. Richard Burr (R-NC) and Michael Bennet (D-CO) that corrects the LNG tax inequity. This change places LNG on parity with diesel fuel by taxing the fuels equally based on energy content, rather than volume. Currently, LNG is effectively taxed at a rate that is 70 percent higher than that of diesel, which creates an unfair penalty on those using domestically produced LNG in their trucking fleets. The Burr/Bennet amendment removes an artificial barrier to the adoption of natural gas vehicles, while the tax credit extensions gives a boost to current and prospective fleets considering the transition to clean, domestic natural gas.