Alternative Fuel Tax

The Minnesota Department of Revenue (DOR) imposes an excise tax on the first licensed distributor that receives E85 fuel products in the state and on distributors, special fuel dealers, or bulk purchasers of other alternative fuels. The Minnesota Department of Revenue Commissioner must determine the tax rate for alternative fuel sales annually. The tax rate for E85 is set by the Minnesota Highway Construction Cost Index. The tax rate for propane is $0.239 per gallon, liquified natural gas is $0.192, E85 is $0.2259 per gallon, biodiesel (B100) is $0.318 per gallon, and compressed natural gas is $0.00251 per thousand cubic feet. Exemptions for certain categories of fuel purchasers apply. For more information, including current tax rates and fees, see the DOR Petroleum Tax Fuel Excise Tax Rates and Fees website.

(Reference Minnesota Statutes 296A.07 and 296A.08)