Oklahoma Laws and Incentives for Propane (LPG)

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

State Incentives

Alternative Fuel Vehicle (AFV) Tax Credit

For tax years beginning before January 1, 2020, a one-time income tax credit is available for 50% of the incremental cost of purchasing a new original equipment manufacturer AFV, excluding electric vehicles, or converting a vehicle to operate on an alternative fuel. The state also provides a tax credit for 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. Equipment used for conversions must be new; must not have been previously used to modify or retrofit any vehicle; must meet applicable federal and state safety standards; and must be installed by a state certified alternative fuels equipment technician. The alternative fuels eligible for the credit are compressed natural gas, liquefied natural gas, hydrogen, and liquefied petroleum gas (propane). Tax credits may be carried forward for up to five years. (Reference House Bill 1718, 2013; House Bill 2005, 2013; and Oklahoma Statutes 68-2357.22)

Alternative Fueling Infrastructure Tax Credit

For tax years beginning before January 1, 2020, a tax credit is available for up to 75% of the cost of installing commercial alternative fueling infrastructure. Eligible alternative fuels include compressed natural gas (CNG), liquefied natural gas, liquefied petroleum gas (propane), hydrogen, and electricity. The infrastructure must be new and must not have been previously installed or used to fuel alternative fuel vehicles. A tax credit is also available for up to 50% of the cost of installing a residential CNG fueling system, for up to $2,500. The tax credit may be carried forward for up to five years. (Reference House Bill 2005, 2013, and Oklahoma Statutes 68-2357.22)

Alternative Fuel Vehicle (AFV) Low-Interest Loans

Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels and for the incremental cost of purchasing an original equipment manufacturer AFV. The loan repayment has a maximum six-year period. For more information, see the Oklahoma Department of Commerce loan application guidelines.

Point of Contact
Marshall Vogts
Director of Programs
Oklahoma Department of Commerce
Phone: (405) 815-5339
marshall_vogts@okcommerce.gov

Laws and Regulations

Alternative Fuel School Bus Conversion Research

The School Transportation Task Force (Task Force) must investigate the costs and benefits of converting school buses and bus fleets to compressed natural gas or another alternative fuel system. The Task Force must make recommendations to the governor and legislature regarding the research findings by December 31, 2013. (Reference Executive Order 2013-13, 2013)

Access to State Alternative Fueling Stations

The Oklahoma Office of Management and Enterprise Services (OMES) Fleet Management Division may construct, install, acquire, operate, and provide alternative fueling infrastructure for use by state agencies and local government and for use by the public in areas of the state where public access to alternative fuel infrastructure is not readily available. OMES must discontinue public access to their fueling stations if a privately owned alternative fueling station opens within a five-mile radius. Alternative fuels include natural gas, liquefied petroleum gas (propane), ethanol, methanol, biodiesel, electricity, and hydrogen. (Reference Oklahoma Statutes 74-130.2 and 74-78)

State Energy Efficiency and Conservation Plans

Each state agency must develop and implement an energy efficiency and conservation plan. As part of its plan, each agency should make every effort to include purchasing preferences for vehicles that use alternative fuel sources, including compressed natural gas, hybrid technology, and biofuels. (Reference Oklahoma Statutes 27A-3-4-106)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

All school and government fleets may convert their vehicles to operate on alternative fuels, and all school districts should consider purchasing only vehicles able to operate on alternative fuels. School and government vehicles capable of operating on an alternative fuel must use the fuel whenever a fueling station is located within a five-mile radius of the respective school district or government department and the price of the alternative fuel is cost competitive with the displaced conventional fuel. If school and government vehicles must be fueled outside the five-mile radius and no fueling station is reasonably available, the school and government vehicles are exempt from this requirement. (Reference Oklahoma Statutes 74-130.3)

Alternative Fuel Vehicle (AFV) Tax and Fee

Compressed natural gas (CNG) used in motor vehicles is subject to a state motor fuel tax of $0.05 per gasoline gallon equivalent (GGE) until January 1, 2020. Beginning January 1, 2020, the tax rate increases to match the rate imposed on diesel fuel. Effective January 1, 2014, liquefied natural gas (LNG) is also subject to a state motor fuel tax rate of $0.05 per diesel gallon equivalent (DGE) until January 1, 2020, after which the tax rate increases to match the rate imposed on diesel fuel.

In lieu of the motor fuel tax, some AFV owners are subject to a motor vehicle fee. An annual flat fee applies to passenger automobiles, pickup trucks, vans and heavy-duty vehicles using liquefied petroleum gas (propane), LNG, methanol, or blends of 85% methanol and 15% gasoline (M85). Propane vehicles with a payload capacity of less than 2,000 pounds (lbs) are taxed at a rate of $50 per vehicle per year. LNG, methanol, and M85 vehicles with a payload capacity of less than 2,000 lbs are taxed at a rate of $100 per vehicle per year. Propane, LNG, methanol, and M85 vehicles with a payload capacity greater than 2,000 lbs are taxed at a rate of $150 per vehicle per year. If the owner acquires the vehicle or converts it to run on the alternative fuel after July 1 of the tax year, the flat fee is half of the above mentioned amount. AFVs must display a decal that the Oklahoma Tax Commission issues on an annual basis. Effective January 1, 2014, LNG vehicles are no longer subject to the annual flat fee and decal requirements.

(Reference Senate Bill 519, 2013, and Oklahoma Statutes 68-500.4, 68-723, and 68-2357.22)

Alternative Fuel Technician Training

The Alternative Fuels Technician Certification Act (Act) regulates the training, testing, and certification of technicians who install, modify, repair, or renovate equipment used in alternative fueling infrastructure and in the conversion of any engine to operate on an alternative fuel. This includes original equipment manufacturer engines dedicated to operate on an alternative fuel. Plug-in electric vehicles (PEVs), PEV charging infrastructure, and PEV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes 74-130.11 through 74-130.24)