Natural Gas Tax

Compressed natural gas (CNG) and liquefied natural gas (LNG) used as motor fuel must be sold in gasoline gallon equivalents (GGE) or diesel gallon equivalents (DGE). A GGE of CNG is equal to 5.66 pounds (lbs.) and a DGE of LNG is equal to 6.06 lbs.

Operators of motor vehicles capable of using natural gas must pay an annual flat rate privilege tax if the vehicle has a gross vehicle weight rating (GVWR) of 10,000 lbs. or less. Natural gas vehicles (NGVs) with a GVWR greater than 10,000 lbs. are subject to privilege taxes charged per hundred cubic feet of CNG and per diesel gallon equivalent of LNG; operators must prepay a portion of this tax annually. The Mississippi Department of Revenue may require the operator of five or more NGVs to pay the tax on all fuel purchased for any purpose; in this case, the fuel distributor will collect the excise tax at the time of sale or delivery. Distributors of natural gas for use in motor vehicles must also pay a privilege tax. Taxes on distributors and utilities do not apply to sales or deliveries made to persons who hold permitted compressed gas user’s decals.

(Reference Mississippi Code 27-59-11 and 75-27-114)