Alternative Fuels Tax or Fee

A state excise tax applies to special fuels at a rate of $0.25 per gallon on a gasoline gallon equivalent basis with the exception of liquefied petroleum gas (propane), which is taxed on a diesel gallon equivalent basis. Special fuels include compressed natural gas (CNG), liquefied natural gas, propane, hydrogen, and fuel suitable for use in diesel engines. In lieu of paying an excise tax on gaseous motor fuels, owners of vehicles powered by CNG, propane, or hydrogen may pay an annual fee. The fee is based on gross vehicle weight rating (GVWR) as follows:

Vehicle owners must purchase permits from gaseous fuels vendors and display the provided decal as evidence that the annual fee has been paid in lieu of the excise tax. Permits for vehicles that are converted to gaseous fuels after July 1 in any year are subject to a prorated fee.

(Reference Senate Bill 2338, 2014, and Idaho Statutes 63-2401 and 63-2424)