**Tennessee imposes a special tax of 1 cent and an environmental fee of .4 cents on all petroleum products. 1st number reflects base rate. 2nd number reflects base rate plus these additional fees.
IFTA - IFTA taxes are applied to vehicles of 3+ axles, or weighing more than 26,000 pounds. IFTA tax tables can be found here.
Natural Gas Station Property Tax Reduction
Any public utility, commercial, or industrial property that is used to fuel natural gas vehicles and that is a certified alternative fueling site may not be valued for property tax purposes at more than 30% of its total installed cost. To qualify as an alternative fueling site, the Tennessee Department of Environment and Conservation must certify that the station uses compressed or liquefied natural gas for the purpose of fueling motor vehicles and is projected to displace more than 6,000 gallons of petroleum annually. Reference House Bill 1272, 2013, and Tennessee Code 67-5-601 and Tennessee Code 67-4-2004
Natural Gas and Propane Vehicle Grant Program
The Tennessee Department of Environment and Conservation's Office of Energy Programs administers the Natural Gas and Propane Vehicle Grant Program (Program). The Program provides fleets with grants to cover 50% of the incremental purchase cost, up to $25,000 per vehicle, for new original equipment manufacturer dedicated natural gas or propane medium- or heavy-duty vehicles. Public, non-profit, and private Tennessee-based fleets are eligible to apply for funding and must intend to operate vehicles in Tennessee for a minimum of six years. Grant applications are limited to one per applicant, must include at least three vehicles, and are not to exceed $250,000. For more information, including eligibility requirements, see the Program website.
Utility District Natural Gas Fueling Station Regulation
Utility districts may own and operate natural gas vehicle (NGV) fueling stations provided that the operation of the station is not franchised to another entity. This regulation does not prohibit private companies from owning or operating NGV fueling stations within a utility district service area. (Reference Tennessee Code 7-82-302)
Alternative Fuel and Fuel-Efficient Vehicle Acquisition and Use Requirements
The Tennessee Department of General Services must ensure that at least 25% of newly purchased passenger motor vehicles procured for use in areas designated as ozone nonattainment areas are hybrid electric vehicles (HEVs), provided that such vehicles are available at the time of procurement. If HEVs are not available, conventional gasoline vehicles achieving an average fuel economy of at least 25 miles per gallon (mpg) may satisfy the requirement. In areas not designated as ozone nonattainment areas, at least 25% of newly purchased passenger motor vehicles must be either HEVs or conventional gasoline vehicles achieving an average fuel economy of at least 25 mpg. State fleets must make every effort to achieve the goal that 100% of newly purchased motor vehicles are energy-efficient vehicles. Energy-efficient vehicles are defined as passenger vehicles that are alternative fuel vehicles using alternative fuels, as defined by the Energy Policy Act of 1992; HEVs; conventional gasoline vehicles achieving an average fuel economy of at least 25 mpg; or vehicles powered by ultra-low sulfur diesel achieving an average fuel economy of at least 30 mpg. Additionally, state agencies should strive to use ethanol and biodiesel in appropriate state-owned vehicles whenever possible and should support the development of biofuels fueling infrastructure. (Reference Tennessee Code 4-3-1109 and Executive Order 33, 2006)
Compressed Natural Gas (CNG) Tax and Permit
A use tax of $0.13 per gallon 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)
Natural Gas Measurement
Compressed natural gas (CNG) and liquefied natural gas (LNG) used for transportation must be sold in gasoline gallon equivalents (GGE) or diesel gallon equivalents (DGE) prescribed by the state, unless equivalent measures are established by the National Conference on Weights and Measures. According to current state law, one GGE is equal to 5.66 pounds (lbs.) of CNG. One DGE is equal to 6.38 lbs. of CNG or 6.06 lbs. of LNG. (Reference Reference - SB1172 Bill Text, and Tennessee Code 47-26-914)
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)
2016 Session - Proposed Legislation
Amends sale and use tax exemption for liquefied gas so that it also extends to compressed natural gas. Fuel otherwise taxed under motor fuel tax are exempt so this provides similar treatment for CNG. Effective July 1, 2015. Reference - HB879 Bill History, Reference - HB879 Bill Text Status: Subcommittee on Finance, Ways and Means recommends passage 3/30/16; passed House 4/13/16; passed Senate 4/20/16.
Companion to HB 879. Amends sale and use tax exemption for liquefied gas so that it also extends to compressed natural gas. Fuel otherwise taxed under motor fuel tax are exempt so this provides similar treatment for CNG. Effective July 1, 2015. Reference - SB799 Bill History, Reference - SB799 Bill Text Status: placed on regular calendar 4/15/16; substituted on Senate floor on 4/19/16 with HB 879.
Amends state fleet provisions intended to encourage greater use of alternative fuel and natural gas vehicles to include propane vehicles in provisions that specifically singled out natural gas vehicles for preference. Reference - HB1743 Bill History, Reference - HB1743 Bill Text SB 1759 substuted for HB 1743 on House Floor 3/6/2014; Enacted April 1 2014
Companion to HB 1743. Amends state fleet provisions intended to encourage greater use of alternative fuel and natural gas vehicles to include propane vehicles in provisions that specifically singled out natural gas vehicles for preference.Reference - SB1759 Bill History, Reference - SB1759 Bill Text Passed Senate 3/3/2014; passed House on 3/6/2014; Enacted April 1 2014
2013 Session - Proposed Legislation
Relates to comptroller; relates to state; deletes requirement that governmental agencies with state owned motor vehicle fleets submit annual energy conservation plan analyses to the comptroller. Reference - HB-54 Bill History, Reference - HB-54 Bill Text Substituted with the SB 81 version
Increases from 20 percent to 25 percent the requirement for state vehicles to reduce their petroleum consumption and establishes Jan. 1, 2016 at the target date for achieving this goal. Allows exception if alternative fuel is not available in certain areas. Reference - HB375 Bill History, Reference - HB375 Bill Text Substituted on House Floor with S. 578; passed House to Senate for concurrence.
Energy Independence Act of 2013. Provides incentives for dedicated CNG and LNG vehicles (90/10 LNG vehicle included in dfn) and bi-fuel CNG vehicles. Eligibility limited to businesses and city or county government units. Conversions and new OEM vehicles qualify. Dedicated vehicles however only include vehicles at or above 14,000 lbs. Provides grants for fleets that plan to convert or purchase 3 or more eligible vehicles -- grants worth 50% of incremental cost with maximum grant worth $25,000 per vehicle. These are competitive grants. Funding comes from the TN biodiesel manufacturers fund. Establishes new state fleet targets - 100% of passenger cars should be efficient or AFVs. 25% of vehicles in NA areas should be hybrid or NGVs. For non-passenger vehicles, calls for 25% to be NGVs. Also appears to be provide property tax exemption for 30% of fueling station property value for businesses and utilities the own natural gas fueling stations. Not clear how much funding is available. Reference - SB852 Bill History, Reference - SB852 Bill Text Passed on May 22 2013
Companion to HB 54. Relates to comptroller; relates to state; deletes requirement that governmental agencies with state owned motor vehicle fleets submit annual energy conservation plan analyses to the comptroller. Reference - SB81 Bill History, Reference - SB81 Bill Text Signed by Governor 3/26/2013
This state was last examined and updated in July, 2016.