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Pennsylvania Retroactively Reduces State Tax Rate for LNG


 Pennsylvania: The tax rate for liquefied natural gas tax is reduced.

The Pennsylvania state tax rate for liquefied natural gas (LNG) was increased, effective January 1, 2015. However, Governor Tom Wolf (D) recently has reversed the decision that led to that increase. Retroactively effective January 1, 2015, the rate for LNG is reduced by 4.3 cents per gallon, to 33.5 cents per gallon.

Gov. Wolf had this to say regarding the reversal:

“One of my goals is to promote and develop a comprehensive energy portfolio for Pennsylvania that supports clean energy alternatives to imported petroleum. Liquefied natural gas is not only a cleaner alternative to diesel, generating lower pollutant emissions when used to fuel vehicles, but it’s also produced here in Pennsylvania from abundant natural gas reserves…. [I]t makes no sense to discourage LNG consumption by taxing it at a higher rate.”

The state defines LNG as “an alternative fuel that should be taxed based on its energy potential as compared to gasoline.”

To put the tax rate for LNG in context, gasoline is taxed at a rate of 50.5 cents per gallon in Pennsylvania, and diesel is taxed at a rate of 64.2 cents per gallon.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.