California – New CNG and Liquefied Natural Gas Measurement And Rates

SALT Report 3525 – The California State Board of Equalization has announced new rates for Compressed Natural Gas to become effective January 1, 2015.

  • Use Fuel Tax Rate – 8.87 cents ($0.0887) for each 126.67 cubic feet or 5.66 pounds of CNG used, measured at the standard pressure and temperature (14.73 pounds PS I at 60° fahrenheit). The new requirement also adjusts the tax rate for LNG to 10.17 cents ($0.1017) for each 6.06 pounds of LNG used.
  • Vendors with Retail Sales – If you make retail sales of CNG and/or LNG, you must begin collecting the adjusted tax rate on January 1, 2015. Additionally, you must place a label on the CNG dispensing apparatus in a conspicuous place indicating, “Gasoline gallon equivalent.” For retail sales of LNG, you must place a label on the dispensing apparatus in a conspicuous place indicating, “Diesel gallon equivalent.” For more information on the labeling requirements, contact the California Department of Food and Agriculture, Division of Measurement Standards, at cdfa.ca.gov/dms.  Sales of LNG and/or CNG to users who have paid the annual flat rate tax, are not subjectto the use fuel tax provided the vehicle has a current flat rate decal attached. However, you must also collect and retain written representation from the flat rate decal holder that they have prepaid the annual flat rate fuel tax. Additionally, you should document all such sales by recording on your receipt the taxpayer’s permit and decal numbers, and the number of gallons sold. You are required to list the total number of tax-exempt gallons sold on your vendor return.

For Further Information:

CA BOE Special Notice