Indiana – Updated Guidance On Sales Of Compressed Natural Gas and Liquefied Natural Gas

SALT Report 3532 – The Indiana Department of Revenue has changed the definition of “special fuel” and added a definition for “natural gas products” to the sales and use tax Commissioner’s Directive #50.  The sales and use tax directive covers the sales of compressed natural gas (CNG) and liquefied natural gas (LNG).

• “Special Fuel” means all combustible gases and liquids that are:
  1. Suitable for the generation of power in an internal combustion engine or a motor; or
  2. Used exclusively for heating, industrial, or farm purposes other than for the operation of a motor vehicle.
• “Natural Gas Product” means:
  1. A liquid natural gas (LNG) or compressed natural gas (CNG) product; or
  2. A combination of liquefied petroleum gas and a compressed natural gas product; used in an internal combustion engine or a motor to propel any form of vehicle, machine, or mechanical contrivance.

For Further Information:

IN Commissioner’s Directive #50