Fuel Gross Receipts Tax on Non-Electric Energy

The Miscellaneous Tax Bill, H.873, was approved by the Ways and Means Committee and formally introduced last week. Among other tax increases, it would increase the fuel gross receipts tax on liquid fossil fuels (heating oil, kerosene, etc.), natural gas, and coal from 0.5% to 0.75%. The tax would not be increased on electricity.

The potential impact would vary depending on fuel prices. For example, assuming $2 per gallon equivalent across fuel types, the tax increase could raise $1.5 million. At $3 per gallon, it could raise $2.13 million. The Joint Fiscal Office is estimating an increase of $1.3 million in FY17.

The bill would require a study and report on extending the tax to wood pellets, compressed natural gas, and liquefied natural gas (there is some debate about whether and at what point in the supply chain the current statute applies to liquefied or compressed natural gas).

Unlike the sales tax on energy, there is no manufacturing or other business exemption to this tax, which is intended to support weatherization and related programs. It is currently a “hidden” tax imposed on dealers. However, H.873 does include a provision to allow dealers to itemize the tax on bills, which will make the issue more transparent for customers.

Industry stakeholders argue that this increase is not warranted for its nominal policy purposes and is simply an attempt to close the budget gap generally. AIV will be working with other stakeholders to oppose this increase. Members interested in engaging on this issue or seeking more information are encouraged to contact us at info@aivt.org.

As noted in other posts on H.873, the bill could be debate on the House Floor as early as Wednesday. If you want to contact your Representatives, you can contact them by leaving messages with the Sergeant-at-Arms Office at 802-828-2228 or 800-322-5616.  You can also send a fax (be sure to identify which Representative you are trying to reach) to 802-828-2424.

To identify your Representatives and find additional contact information, you can click here.