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Texas Taxes

Liquefied Gas

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A tax is imposed on the use of liquefied gas (propane, butane, methane, ethane, or a mixture of those gases) as a motor fuel. Motor vehicles licensed in Texas and equipped with a liquefied gas system are required to prepay the tax by purchasing a liquefied gas tax decal. Motor vehicles licensed in other states, Mexico, or licensed under the IFTA pay the tax at the retail pump to a licensed dealer. (Tax Code Sec. 162.301) (Tax Code Sec. 162.305)


Effective Sep. 1, 2013 – Legislative Change

***Tax Collection Changes***

Effective Sept. 1, 2013, dealers are required to collect the $0.15 per gallon tax on Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) when the fuel is sold or delivered into a motor vehicle’s fuel supply tank. A person who delivers CNG or LNG from their own storage into their own vehicles is also required to be licensed as a CNG-LNG dealer. Vehicles that operate using CNG or LNG will no longer prepay the CNG or LNG tax by purchasing a decal.

The sale of Liquefied Gas (propane, butane, methane, ethane, or a mixture of those gases) will remain the same.

These changes are a result of the Texas Legislature passed House Bill 2148 in the 83rd regular session.

Rate Details and Other Information

Rates

Fifteen cents ($.15) per gallon.

Prepaid users: based on mileage and registered gross weight of vehicle. (Tax Code Sec. 162.305)

Deductions

Apply to the timely payment of the tax:

  • Dealers - 1 percent
    (Tax Code Sec. 162.308)
  • Interstate Truckers 1/2 percent
    (Tax Code Sec. 162.308)

Due Date

Licensed dealers and interstate truckers (except IFTA licensed) - yearly: January 25 for previous year (Tax Code Sec. 162.308).

Prepaid users: 15 days prior to anniversary (Tax Code Sec. 162.305).

Electronic Reporting

Not at this time.

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