Tennessee Laws and Incentives for Fuel Taxes

The list below contains summaries of all Tennessee laws and incentives related to Fuel Taxes.

Laws and Regulations

Liquefied Gas Tax

A use tax of $0.14 per gallon is imposed on liquefied gas used for operating motor vehicles on public highways in addition to a pre-paid annual vehicle tax according to the following:

Government agencies are exempt from the liquefied gas use tax. Liquefied gas is all combustible gas that exists in the gaseous state at 60 degrees Fahrenheit and at a pressure of 14.7 pounds per square inch, but does not include gasoline, diesel fuel, or compressed natural gas. Additional restrictions may apply. (Reference Tennessee Code 67-3-1101, 67-3-1102, 67-3-1103, and 67-3-1106)

Compressed Natural Gas (CNG) Tax and Permit

A $0.13 per gallon tax is imposed on CNG used for operating motor vehicles on public highways. For the purpose of determining the tax on CNG, a gallon equivalent factor of 5.66 pounds per gallon is used. A CNG vehicle user must apply for and obtain a CNG user's permit from the Tennessee Department of Revenue. Government agencies are exempt from this tax. (Reference Tennessee Code 67-3-1113 and 67-3-1114)

Compressed Natural Gas (CNG) Dealer Permit

CNG dealers must apply for and obtain a permit from the Tennessee Department of Revenue. The permit authorizes the dealer to collect and remit taxes on CNG delivered to motor vehicles by means of a dispenser with meter capability. This permit will remain valid as long as the dealer provides timely reports and remits taxes when due, or until surrendered or cancelled. All CNG meters and dispensers are subject to inspection and verification by the Tennessee Department of Agriculture's Weights and Measures enforcement provisions. (Reference Senate Bill 2718, 2012, and Tennessee Code 67-3-1119 through 67-3-1120)