LP Gas

Propane a benefactor of excise tax equalization

President Obama signed a bill that includes a provision equalizing excise tax rates for LP gas, liquefied natural gas and compressed natural gas. The section was part of H.R. 3236, a bill that was primarily developed to extend federal highway funds into October.

According to the National Propane Gas Association (NPGA), the equalization bases the calculation for the excise tax levied against propane used as a motor fuel on energy content rather than volume.

NPGA says the action will result in lower excise taxes levied on propane used as a motor fuel because it has a lower energy content than gasoline. The reduction takes effect Jan. 1, 2016.