Current through Register Vol. 49, No. 9, September, 2024
Pursuant to the authority granted by Ark. Code Ann. §§
26-18-301 and
26-62-104, the
Director of the Arkansas Department of Finance and Administration does hereby
promulgate the following rules and regulations for the purpose of facilitating
compliance with the Alternative Fuels Tax Law, Act 1119 of 1993, as amended,
and to facilitate the administration, enforcement, and collection of the taxes
levied by Ark. Code Ann. §
26-62-101,
el seq. as it relates to liquefied natural gas (LNG).
A.
Effective Date. These rules
shall be effective from and after September 1, 2014.
B.
Purpose and Scope. The
following rules are promulgated to implement and clarify Title 26. Chapter 62
of the Arkansas Code as it pertains to liquefied natural gas (LNG) used as an
alternative fuel to generate power in an internal combustion engine or motor
for a motor vehicle.
C.
Definitions. For purposes of these rules, unless otherwise required by
their context, the following definitions apply:
1. "Department" means and refers to the
Arkansas Department of Finance and Administration and its authorized agents.
For purposes of these rules, the terms "Department" and "DFA" may be used
interchangeably.
2. "Exempt" refers
to those instances of sales, uses, or storage of liquefied natural gas that
otherwise would be considered taxable but meet certain express conditions set
forth in paragraph E.2. of these rules such that the instances stated therein
are free from the tax levied by Ark. Code Ann. §
26-62-201(a).
No other sales, uses, or storage of liquefied natural gas are exempt.
3. "Gallon equivalent" or "equivalent gallon"
are terms that may be interchangeably used in regard to describing the
appropriate measurement of liquefied natural gas (LNG) for use in an internal
combustion engine or as motor fuel. Based on United States standards or
industry standards, a gallon equivalent of LNG refers to the regular grade
"gasoline gallon equivalent" or "diesel gallon equivalent" of LNG and is
measured in pounds. Specifically, one gasoline gallon equivalent (1 dge) of LNG
is equivalent to five and thirty-seven/hundredths (5.37) pounds of LNG cooled
to approximately -259° Fahrenheit at atmospheric pressure and stored in
insulated cryogenic tanks. One diesel gallon equivalent (1 dge) of LNG is the
equivalent of six and six/hundredths (6.06) pounds of LNG cooled to
approximately -259° Fahrenheit at atmospheric pressure and stored in insulated
cryogenic tanks.
4. "Liquefied
Natural Gas" or "LNG" means natural gas that has been cooled to a liquid state
and is suitable for use. distributed, or used as an alternative fuel for
internal combustion engines or motors in motor vehicles. LNG may also include
small amounts of products commonly referred to as methane, ethane, propane,
butane, heavier alkanes. and nitrogen.
5. "Taxpayer" refers to the person
responsible for remitting the taxes due to the Department pursuant to the
Alternative Fuels Tax Law.
D.
Director's Authority.
1. Pursuant to the authority provided in Ark.
Code Ann. §
26-62-104, the
Director promulgates these rules and regulations to facilitate the collection
of the alternative fuels taxes levied in Title 26, Chapter 62 of the Arkansas
Code as it relates to LNG.
2. Ark.
Code Ann. §
26-62-201(a)(2)
authorizes the Director to determine the applicable rates to be imposed for
each type of alternative fuel.
E.
Amount and Nature of Tax.
1. Tax Rate for LNG. The tax rate applied to
sales and use of LNG shall be measured per gasoline gallon equivalent (5.37
pounds) as set forth in paragraph C.4. of these rules. The tax rate imposed for
each gasoline gallon equivalent of LNG depends on the number of motor vehicles
licensed in Arkansas using LNG and shall be in accordance with the number of
licensed motor vehicles using LNG and the corresponding tax rates as set forth
in the table contained in Ark. Code Ann. §
26-62-201(b).
The tax rate imposed should be the gasoline gallon equivalent regardless of
whether LNG is used in lieu of gasoline or diesel fuel.
2. Exempt Alternative Fuels Sales. Uses, or
Storage.
(a) Sales to or use by the United
States Government, or any agency or instrumentality thereof;
(b) Liquefied natural gas imported into this
state in the fuel supply tanks, including any additional containers, of motor
vehicles being used solely for noncommercial purposes if the aggregate capacity
of the fuel supply tanks, including any-additional containers, does not exceed
thirty equivalent gallons:
(c) No
other exemptions apply.
F.
Payment of the Tax. The tax
shall be collected and paid in accordance with Ark. Code Ann. §
26-62-202.
G.
Review and Appeals. Reviews
and appeals are to be conducted consistent with the provisions of the Arkansas
Tax Procedure Act, Ark. Code Ann. §§
26-18-101,
et seq. See also Ark. Code Ann. §§
26-62-108.
Sources: Ark. Code Ann. §§
26-62-101,
et seq. and
26-18-101,
el seq.
