Natural Gas Laws and Incentives in Arkansas

The list below contains summaries of all Arkansas laws and incentives related to natural gas.

Laws and Regulations

Alternative Fuel Definition and Specifications

Alternative fuels include biofuel, ethanol, methanol, hydrogen, coal-derived liquid fuels, electricity, natural gas, propane gas, or a synthetic transportation fuel. Biofuel is defined as a renewable, biodegradable, combustible liquid or gaseous fuel derived from biomass or other renewable resources that can be used as transportation fuel, combustion fuel, or refinery feedstock and that meets ASTM specifications and federal quality requirements for each category or grade of fuel. Biofuel includes biodiesel or renewable diesel, renewable gasoline, renewable jet fuel and naphtha, biocrude, biogas, and other renewable, biodegradable, mono alkyl ester combustible fuel derived from biomass. Ethanol is ethyl alcohol derived from biomass that meets ASTM D4806-04a and federal quality requirements. Synthetic transportation fuel is a liquid fuel produced from biomass by a gasification process or other refining process that meets any applicable state or federal environmental requirement. (Reference Arkansas Code 15-13-102 and 26-62-102)

Alternative Fuel Vehicle Conversion Notification

Any individual or company who converts a vehicle to operate on an alternative fuel must report the conversion to the Arkansas Department of Finance and Administration (DFA) within 10 days of the conversion. An owner or operator who fails to report such a conversion may be subject to a penalty. For more information, including reporting forms, see the DFA website. (Reference Arkansas Code 26-56-315 and 26-62-214)

Alternative Fuels Tax and Reporting

Excise taxes on alternative fuels are imposed on a gasoline gallon equivalent (GGE) basis. The tax rate for each alternative fuel type is based on the number of motor vehicles licensed in the state that use the specific fuel, not including vehicles the federal government owns or leases. The Arkansas Department of Finance and Administration (DFA) and the Arkansas State Highways and Transportation Department must prepare an annual report with the number of alternative fuel vehicles licensed in the state and the tax revenue generated. The DFA must establish the annual tax rate by April 1st. Licensed alternative fuel suppliers must pay alternative fuel taxes for product dispensed, sold to a dealer or user, or used in a motor vehicle owned or operated by the alternative fuel supplier. Alternative fuel suppliers must prepare a monthly report on the number of GGEs of alternative fuels sold and possess a sufficient number of credits (also known as sales tickets) to cover the alternative fuel sales tax. (Reference Arkansas Code 19-6-301, 26-56-502, 26-56-601, and 26-62-201 through 262-62-209)

Liquefied Natural Gas (LNG) and Propane Tax and User Permit

LNG and propane used as motor fuel are taxed on a per vehicle basis through an annual flat fee special fuel user's permit. The fee is based on the vehicle's gross vehicle weight rating. For each vehicle fueled by LNG or propane, the vehicle owner must apply for and obtain a liquefied gas special fuel user's permit from the Arkansas Department of Finance and Administration (DFA). For more information, including fees and applications, see the DFA website. (Reference Arkansas Code 26-56-102, 26-56-301 and 26-56-304)

Natural Gas Metering

Individuals who use natural gas for residential or other tax-free purposes may not use natural gas in motor vehicles unless the natural gas is obtained through a separate meter which the alternative fuels supplier installed for such purposes. (Reference Arkansas Code 26-62-203)

More Laws and Incentives

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