Proposed delay of natural gas fuel tax gains support from industry associations

by | Mar 14, 2023

  • A bill proposing to delay the implementation of a natural gas fuel tax in Florida until 2026 has passed the Committee on Transportation
  • The legislation has received support from business-friendly organizations, including the Florida Natural Gas Association, the Florida Chamber of Commerce, the Associated Industries of Florida, and the Florida Trucking Association.
  • The measure would postpone taxes on natural gas fuel, including the “ninth-cent fuel tax” and the “local option fuel tax,” which are both imposed on motor fuel equivalent gallons of natural gas fuel.

A measure to delay the implementation of a natural gas tax passed the Committee on Transportation on Monday with the endorsement of a number of prominent business-friendly organizations.

The legislation, introduced by Sen. Joe Gruters, proposes a delay in the implementation of a natural gas fuel tax in Florida until 2026, as opposed to the previously established date of 2024.

The bill puts forth a postponement on taxes on natural gas fuel, including the “ninth-cent fuel tax,” an additional tax of one cent per motor fuel equivalent gallon of natural gas fuel, and the “local option fuel tax,” an additional tax of one cent per motor fuel equivalent gallon of natural gas fuel imposed by each county. Florida’s current tax exemption for natural gas fuels is scheduled to expire on December 31, 2023, having first been established on January 1, 2014.

“This exemption is important to continue due to the growth for additional refueling infrastructure with natural gas in the fleets working towards emissions vehicles,” said Gruters. “Having this option is a positive, especially during hurricane season, when fleets don’t need to compete for valuable fuel supply.”

The proposed legislation also introduces a new tax on natural gas fuel called the “State Comprehensive Enhanced Transportation System Tax,” which will be calculated based on a rate determined by the Florida Department of Revenue. The tax rate will be adjusted annually by the percentage change in the average of the Consumer Price Index issued by the United States Department of Labor.

Business-focused entities, including the Florida Natural Gas Association (FNGA), voiced their support for the bill. The FNGA and other proponents of the bill assert that allowing the exemption to lapse would result in an overnight increase of approximately $0.31 per gallon in the fuel budgets of trucking fleets across Florida that have already made the transition to natural gas fuels. They argue that this additional tax would only add to the global supply challenges in the fuel market, which already contribute to service disruptions and cost increases.

“Natural gas-fueled vehicles are a no-brainer. They are cleaner and more efficient and use fuel sourced from right here in America,” said Dale Calhoun, spokesperson for the FNGA said in a statement to The Capitolist. “Extending the more than decade-long tax exemption on natural gas fuels will allow Florida businesses to continue transitioning their fleets to natural gas-fueled vehicles, which will provide copious benefits to the Sunshine State’s economy and environment.”

The group further contends that extending the tax exemption would reduce carbon emissions, lessen America’s dependence on hostile countries for fuel, and allow businesses to allocate tax savings toward payroll and other workforce expenses.

“AIF supports the continued market development and expansion of natural gas fleets, and it is clear that Florida’s natural gas fuel tax exemption has aided that effort,” Adam Basford, Associated Industries of Florida (AIF) Vice President of Governmental Affairs said. “If this tax exemption expires, the fleets that have already transitioned to natural gas will see an immediate, significant increase in their fuel budgets. With ongoing inflation and global supply chain issues, we believe that preserving this exemption is responsible and will benefit both businesses and consumers.”

In addition to the FNGA and AIF, the Florida Chamber of Commerce and the Florida Trucking Association have also given their backing to the bill. Attempts to reach these groups went unanswered.

1 Comment

  1. Ron Kirkland

    Another big industry getting out of paying for road maintenance that We The People have to pay every day we travel! Big garbage trucks just beat up our neighborhood roadways and we have to pay for repairs?

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