House Bill 170 Motor Fuel Changes

Summary

  • Beginning July 1, 2015, the current prepaid state tax component (representing a 3% motor fuel tax and 1% sales tax) will be eliminated

  • House Bill 170 changes state motor fuel tax to a single state motor fuel excise tax

  • The state excise tax rate will be 26 cents/gallon for most fuel types (gasoline, LPG, and special fuels including CNG), except for diesel which will be 29 cents/gallon

  • Aviation gasoline will continue to be subject to a 1 cent/gallon excise tax when sold to a licensed distributor, 26 cents otherwise

  • Please reference House Bill 170 for further information

  • How is state motor fuel tax changing due to House Bill 170?

    HB170 eliminates the prepaid state motor fuel tax. HB170 also changes the motor fuel excise tax rate and provides that motor fuel excise tax will be the only statewide motor fuel tax imposed, although local taxes will continue to apply.

  • What is the new state motor fuel tax rate beginning July 1, 2015?

    The excise tax rate is 26 cents/gallon for gasoline, LPG, and special fuels including CNG. The excise tax rate is 29 cents/gallon for diesel. The excise tax rate is 26 cents/gallon for aviation gasoline, except when sold to a licensed distributor which will be 1 cent/gallon.

  • How does House Bill 170 affect local taxes on motor fuel (prepaid local sales tax)?

    House Bill 170 imposes a $3.00 cap on the average retail sales price used to calculate the prepaid local tax rate. The Department will continue to publish a semi-annual bulletin listing the average retail sales price used to calculate prepaid local tax.

  • Which motor fuel excise tax exemptions expire July 1, 2015?

    Certain exemptions from state motor fuel tax were already set to expire on June 30, 2015 and such exemptions were not renewed under House Bill 170. Entities that have been using these exemptions will be subject to the motor fuel excise tax beginning July 1, 2015

    • Public mass transit vehicles owned by public transportation systems receiving certain federal funding (O.C.G.A. § 48-9-3(10)(A)

    • Vehicles operated by a public campus transportation system (O.C.G.A. § 48-9-3(10)(B)

    • Public school systems purchasing motor fuel for the operation of school buses (O.C.G.A. § 48-9-3(11)

      *However, to the extent that such entities are exempt from sales tax under O.C.G.A § 48-8-3, the sale or purchase of motor fuel to these entities will continue to be exempt from prepaid local

  • What are the changes on State sales tax and motor fuel?

    Effective July 1, 2015, sales of motor fuel are exempted from the 4% state sales tax. But sales of motor fuel, other than gasoline, for purposes other than propelling motor vehicles on public highways will be fully subject to the state sales tax, this includes jet fuel.  State sales tax is not imposed on motor fuel used to propel motor vehicles on the public highway. 

  • How does House Bill 170 change the taxation of jet fuel purchased by qualifying airline?

    Effective July 1, 2015 the 1% state sales and use tax exemption provided under O.C.G.A. § 48-8-3(33.1)(A) for the sale or use of jet fuel to or by a qualifying airline at a qualifying airport is repealed. Therefore, all taxable sales of jet fuel will be subject to the full 4% State sales tax rate. Additionally, beginning with July 2015 sales tax returns, all taxable jet fuel sales will be required to be reported separately by county (changes are being made to ST-3 to accommodate reporting). 

    Please note:

    *Jet fuel is not subject to motor fuel tax if delivered and pumped directly into wing of aircraft.   

    *Jet Fuel is used in racing fuel. Leaded racing fuel is considered non-taxable, unleaded racing fuel is taxable.

    *General Rule: The sale or use of jet fuel for highway use in diesel engines is subject to motor fuel excise tax, and local sales and use tax.