Propane Laws and Incentives in Louisiana

The list below contains summaries of all Louisiana laws and incentives related to propane.

Laws and Regulations

Alternative Fuel Excise Taxes

All licensed on-road vehicles fueled with compressed natural gas (CNG) or liquefied petroleum gas (propane) are subject to a special fuels tax through the Excise Taxes Division of the Louisiana Department of Revenue. Vehicle owners or operators must pay a special fuels tax of $0.16 per gallon equivalent of natural gas at the time fuel is dispensed or delivered into the tank of a motor vehicle. A gasoline gallon equivalent is equal to 5.66 lbs. of CNG and a diesel gallon equivalent is equal to 6.06 lbs. of liquefied natural gas (LNG). A gallon of propane is subject to 73% of the state tax on a gallon of gasoline. Alternative fuel distributers must be licensed by the state. (Reference Louisiana Revised Statutes 47:802.3)

Point of Contact
Special Programs Division - Excise Tax
Louisiana Department of Revenue
Phone: (225) 219-2200

Alternative Fuel and Advanced Vehicle Acquisition Requirements

The Louisiana Division of Administration must purchase dedicated alternative fuel vehicles (AFVs) capable of operating on natural gas or liquefied petroleum gas (propane), or bi-fuel vehicles capable of operating on conventional fuel or natural gas, propane, or any non-ethanol advanced biofuel. State agency vehicles may be granted a waiver if fueling stations are not available within a 25 mile radius, the agency cannot recoup the incremental cost of the vehicle within 60 months, or the available vehicles do not meet agency specifications.

Any AFV a state agency purchases or leases must have a minimum fuel economy of 18 miles per gallon (mpg) for city driving, 28 mpg for highway driving, or a combined city/highway average of 24 mpg. Law enforcement vehicles, certified emergency vehicles, and state agency vehicles with prior written authorization are exempt from this requirement. (Reference Louisiana Revised Statutes 39:364 and 39:1646)

Compressed Natural Gas (CNG) and Propane Regulatory Authority

The Louisiana Department of Natural Resources' Office of Conservation has regulatory authority over CNG safety, including fueling stations and the installation of conversion equipment in a vehicle. Vehicles capable of operating on, liquefied petroleum gas (propane) must have passed a safety inspection from the Louisiana Liquefied Petroleum Gas Commission. (Reference Louisiana Revised Statutes 30:731 and 30:732)

Propane Self-Service Fueling Station Regulations

Propane retailers may offer self-service, coin-operated, credit card, or any other pump-activating fuel dispensing device to the general public. The retailer must post readily-visible step-by-step instructions to the operator. The Louisiana Liquefied Petroleum Gas Commission must promulgate and adopt rules and regulations to provide education and instruction on the safe operation and use of automatic fuel dispensing devices. (Reference Louisiana Revised Statutes 40:1853.1)

State Incentives

Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Tax Credit

Louisiana offers a nonrefundable income tax credit of 30% of the cost of qualified clean-burning motor vehicle fuel property, including:

  • The purchase and installation of certified fuel system conversion equipment to convert a gasoline or diesel vehicle to operate on an alternative fuel;
  • Alternative fueling delivery equipment including compression equipment, storage tanks, and dispensing units for alternative fuel at the point where the fuel is delivered, and;
  • Purchase of property which is directly related to the delivery of an alternative fuel for use in AFVs.
For new original equipment manufacturer AFVs, a taxpayer may take a tax credit of 10% of the cost of the motor vehicle, up to $2,500.

To qualify for the tax credit, vehicles must have a dedicated alternative fuel storage and delivery system and be registered in Louisiana. For the purpose of these incentives, alternative fuels include natural gas, propane, biofuel, biodiesel, methanol, ethanol, and electricity. Electric vehicles must have at least four wheels, be used primarily on-road, be able to attain a minimum speed of 55 miles per hour, have a minimum battery capacity of four kilowatt-hours, and be capable of being charged externally. To be eligible for the credit for costs associated with converting a vehicle to alternative fuel usage, commercial vehicles must be registered and primarily used in Louisiana for four years after the date of the conversion. For purposes of this requirement, a commercial vehicle is deemed primarily used in Louisiana when 80% of the miles traveled in the four years after the conversion occur in Louisiana. Restrictions may apply.

(Reference Louisiana Revised Statutes 47:6035 and Louisiana Administrative Code Title 61, Section 1913)

Vehicle Emissions Reduction and Electric Vehicle Supply Equipment (EVSE) Project Funding

The Louisiana Department of Environmental Quality’s (DEQ) Volkswagen Eligible Mitigation Action Project program provides up to 80% of the cost of new diesel or alternative fuel replacements and repowers for eligible government entities. For eligible non-government entities, the Program provides up to 40% of the cost of a new diesel or alternative fuel repower, up to 25% of the cost of a new diesel or alternative fuel vehicle, and up to 75% of the cost of an all-electric repower or replacement, with associated charging infrastructure. Qualifying alternative fuels include, but are not limited to, natural gas and propane. Vehicles that qualify for replacement or repower include:

Model YearVehicle Type
1992-2009Class 8 Local Freight Trucks and Port Drayage Trucks
1992-2009Class 4-7 Local Freight Trucks
2009 or olderClass 4-8 School Buses, Shuttle Buses, and Transit Buses

Eligible government and non-government entities may also receive funding for the all-electric repower or replacement of airport ground support equipment, forklifts, and port cargo handling equipment, as well as for the purchase, installation, and maintenance of light-duty EVSE.

The program is funded by Louisiana’s portion of the Volkswagen Environmental Mitigation Trust. For more information, including application guidelines, see the DEQ Louisiana Volkswagen Environmental Mitigation Trust website.

Utility/Private Incentives

Propane Vehicle and Mower Incentive - Louisiana Liquefied Petroleum Gas Commission

Propane vehicle incentives are available to public and private fleets of at least three vehicles. New propane vehicles are eligible for $1,500, and propane vehicle conversions are eligible for up to $800. Additionally, $1,500 is available for each new propane commercial mower and up to $800 for each converted propane commercial mower. Each recipient is limited to four incentive awards, up to $5,000, per year.

All vehicle and mower conversion systems must be certified by the U.S. Environmental Protection Agency or the California Air Resources Board. Conversions must be performed at a participating service dealer. To qualify, existing mowers must have less than 1,000 operating hours and be less than two years old prior to conversion. All vehicles and equipment must operate in Louisiana for at least three years, or until sold. Funds are available on a first-come, first-served basis. Additional terms and conditions apply. For more information, see the Louisiana Liquefied Petroleum Gas Commission website.

More Laws and Incentives

To find laws and incentives for other alternative fuels and advanced vehicles, search all laws and incentives.