Arkansas Laws and Incentives for Propane (LPG)

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

Laws and Regulations

Alternative Fuel Vehicle (AFV) and Infrastructure Rebate Program Establishment

The Arkansas Energy Office of the Arkansas Development Commission will administer a rebate program funded by the Clean-Burning Motor Fuel Development Fund. Rebates will be available for 50% of the conversion cost up to $4,500, specifically for vehicle conversions to hydrogen fuel cells, compressed natural gas (CNG), liquefied natural gas (LNG), or liquefied petroleum gas (propane). Rebates will also be available for CNG, LNG, and propane fueling stations in the amount of 75% of qualifying costs, up to $400,000. This incentive is not yet available (verified October 2013). (Reference Arkansas Code 15-10-901 to 15-10-904 and 19-5-1249)

Alternative Fuel Vehicle (AFV) Conversion

Any individual or company who converts a vehicle to operate on an alternative fuel must report the conversion to the Arkansas Department of Finance and Administration within 10 days of the conversion. An owner or operator who fails to report such a conversion may be subject to a penalty. (Reference Arkansas Code 26-62-214)

Liquefied Natural Gas (LNG) and Propane Tax and User Permit

LNG and liquefied petroleum gas (propane) used as motor fuel are taxed on a per vehicle basis through an annual flat fee special fuel user's permit. The fee is based on the vehicle's gross vehicle weight rating. For each vehicle fueled by LNG or propane, the vehicle owner must apply for and obtain a liquefied gas special fuel user's permit from the Arkansas Department of Finance and Administration. (Reference Arkansas Code 26-56-301 and 26-56-304)

Alternative Fuels Tax

Excise taxes on alternative fuels are imposed on a gasoline gallon equivalent basis. The tax rate for each alternative fuel type is based on the number of motor vehicles licensed in the state that use the specific fuel, not including vehicles the federal government owns or leases. (Reference Arkansas Code 26-62-201)

Alternative Fuel Definition and Specifications

Alternative fuels include biofuel, ethanol, compressed natural gas, propane gas, or a synthetic transportation fuel. Biofuel is defined as a renewable, biodegradable, combustible liquid or gaseous fuel derived from biomass or other renewable resources that can be used as transportation fuel, combustion fuel, or refinery feedstock and that meets ASTM specifications and federal quality requirements for each category or grade of fuel. Biofuel includes biodiesel or renewable diesel, renewable gasoline, renewable naphtha, biocrude, biogas, and other renewable, biodegradable, mono alkyl ester combustible fuel derived from biomass. Ethanol is ethyl alcohol derived from biomass that meets ASTM D4806-04a and federal quality requirements. Synthetic transportation fuel is a liquid fuel produced from biomass by a gasification process or other refining process that meets any applicable state or federal environmental requirement. (Reference Arkansas Code 15-13-102)