The Pennsylvania Department of Revenue published a notice in the December 13, 2014 PA Bulletin outlining that the state Oil Company Franchise Tax (OCFT) on gasoline and diesel fuel will be increasing on January 1, 2015. The tax on gasoline will be 50.5 cents per gallon (up 9.8 cents from 2014) and the tax on diesel fuel will be 64.2 cents per gallon (up 13.2 cents from last year).
The increase will finance transportation infrastructure upgrades and replaces a 12 cents-per-gallon retail gas and diesel tax which was eliminated on January 1, 2014.
The OCFT will be adjusted as follows:
• Increases the cap to $2.49 on January 1, 2015.
• Eliminates the entire cap on January 1, 2017.
• A new “floor price” is established at $2.99 on January 1, 2017 to protect the state from any sharp declines in price.
The Revenue Department is also required to compute tax rates applicable to each alternative fuel on a gallon-equivalent-basis. The amount determined for each alternative fuel is subject to the OCFT tax currently imposed on one gallon of gasoline (50.5¢).
The 2015 tax rates for Compressed Natural Gas (CNG) and Hydrogen are calculated by using the unit of measurement referred to as the gasoline gallon equivalent (GGE). A GGE is the amount of alternative fuel it takes to equal the energy content of one liquid gallon of gasoline. The Department recognizes the prevailing practice in private industry to adopt the “diesel gallon equivalent” (DGE) for measuring Liquefied Natural Gas (LNG).
Like the GGE, a DGE is a unit of measurement which compares the amount of energy content contained in a certain quantity of LNG to another form of energy (which for LNG, is diesel fuel). Industry standard conversions convey that 1.7 gallons of LNG would equal 1 DGE of LNG.
For more details, log on to: http://www.pabulletin.com/secure/data/vol44/44-50/2591.html.
• Increases the cap to $2.49 on January 1, 2015.
• Eliminates the entire cap on January 1, 2017.
• A new “floor price” is established at $2.99 on January 1, 2017 to protect the state from any sharp declines in price.
The Revenue Department is also required to compute tax rates applicable to each alternative fuel on a gallon-equivalent-basis. The amount determined for each alternative fuel is subject to the OCFT tax currently imposed on one gallon of gasoline (50.5¢).
The 2015 tax rates for Compressed Natural Gas (CNG) and Hydrogen are calculated by using the unit of measurement referred to as the gasoline gallon equivalent (GGE). A GGE is the amount of alternative fuel it takes to equal the energy content of one liquid gallon of gasoline. The Department recognizes the prevailing practice in private industry to adopt the “diesel gallon equivalent” (DGE) for measuring Liquefied Natural Gas (LNG).
Like the GGE, a DGE is a unit of measurement which compares the amount of energy content contained in a certain quantity of LNG to another form of energy (which for LNG, is diesel fuel). Industry standard conversions convey that 1.7 gallons of LNG would equal 1 DGE of LNG.
For more details, log on to: http://www.pabulletin.com/secure/data/vol44/44-50/2591.html.
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