Utah Incentives and Laws for Propane (LPG)

The list below contains summaries of all Utah incentives and laws related to Propane (LPG).

State Incentives

Clean Fuel Vehicle Tax Credit

The state provides an income tax credit of 35% of the vehicle purchase price or $2,500, whichever is less, for an original equipment manufactured compressed natural gas vehicle registered in Utah. Other new clean fuel vehicles that meet air quality and fuel economy standards may be eligible for a credit of up to $750. The state also provides a credit of 50% of the cost of converting a vehicle to operate using a clean fuel (including propane, natural gas, or electricity), up to a maximum of $2,500 per vehicle. Those claiming the credit must provide documentation. These incentives expire December 31, 2013. Additional restrictions apply. (Reference Utah Code 19-1-402, 59-7-605, and 59-10-1009)

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Grants and Loans

The Utah Clean Fuels and Vehicle Technology Grant and Loan Program (Program), funded through the Clean Fuels and Vehicle Technology Fund, provides grants and loans to assist businesses and government entities in covering: 1) the cost of converting vehicles to operate on clean fuels; 2) the incremental cost of purchasing original equipment manufactured clean fuel vehicles; and 3) the cost of retrofitting diesel vehicles with U.S. Environmental Protection Agency verified closed crankcase filtration devices, diesel oxidation catalysts, and/or diesel particulate filters. These grants and loans may serve as matching funds for federal and non-federal grants. The Program also provides loans for the purchase of fueling equipment for public/private sector business and government vehicles. The Program also provides loans for the purchase of fueling equipment for public/private sector business and government vehicles. The Program does not support E85 or biodiesel projects. For the purpose of the Program, clean fuels include propane, compressed natural gas, and electricity. (Reference Utah Code 19-1-401 through 19-1-405)

Reduced Alternative Fuels Tax

The tax imposed on propane and electricity used to operate motor vehicles is 3/19 of the traditional motor fuels tax rate of $0.245. The tax on compressed natural gas is $0.085 per gasoline gallon equivalent; this rate will be modified proportionally with any changes to the traditional motor fuel rate. Beginning July 1, 2011, the tax on liquefied natural gas is $0.085 per gasoline gallon equivalent; this rate will be modified proportionally with any changes to the traditional motor fuel rate. The Utah Revenue and Tax Code allows a reduction of motor and special fuel taxes if the motor or special fuel is already taxed by the Navajo Nation. Retailers, wholesalers, and suppliers of special fuel are eligible for a refund of the special fuel tax if dyed diesel fuel is mixed with special fuel and the mixed special fuel is returned to the refinery for re-refining. (Reference House Bill 184, 2011, and Utah Code 59-13-102, 59-13-201, 59-13-301, and 59-13-322)

Alternative Fuel Vehicle Decal and High Occupancy Vehicle (HOV) Lane Exemption

Vehicles operating on propane, compressed natural gas, liquefied natural gas, or electricity are permitted to use HOV lanes, regardless of the number of passengers. As of July 2011, qualified vehicles must display special clean fuel decal issued by the Utah Department of Transportation. (Reference House Bills 24 and 184, 2011, and Utah Code 41-1a-416, 41-1a-418, 41-6a-702, 59-13-102, and 72-6-121)

Laws and Regulations

Alternative Fuel Vehicle Inspection and Permit

The State Tax Commission (Commission) may require vehicles operating on clean fuels to be inspected for safe operation. In addition, clean fuel vehicles that have a gross vehicle weight rating of more than 26,000 pounds or have more than three axels are required to obtain a special fuel user permit from the Commission. Clean fuels are defined as propane, compressed natural gas, liquefied natural gas, and electricity. (Reference House Bill 184, 2011, and Utah Code 59-13-102, 59-13-303, and 59-13-304)

Provision for Establishment of Alternative Fuel Use Mandate

The Utah Air Quality Board may require fleets that own 10 or more vehicles that are capable of being fueled at a central location to use clean fuels, if such a mandate is necessary to meet national air quality standards. Clean fuels are defined as propane, compressed natural gas, and electricity. Additional restrictions apply. (Reference Utah Code 19-2-105.3)

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Content Last Updated: 07/14/2011