Amends TCA Title 67.

ON APRIL 21, 2023, THE SENATE ADOPTED AMENDMENT #2 AND PASSED SENATE BILL 118, AS AMENDED.<br /> <br /> AMENDMENT #2 rewrites this bill to revise various provisions of present law pertaining to alternative fuels under the petroleum products and alternative fuels tax and exemptions to the sales and use tax. <br /> <br /> DEFINITIONS<br /> <br /> Under present law, "alternative fuel" means a liquefied petroleum gas or compressed natural gas product used in an internal combustion engine or motor to propel any form of motor vehicle, machine, or mechanical contrivance. "Alternative fuels tax" means the per gallon tax on liquified gas and compressed natural gas. <br /> <br /> This amendment adds hydrogen gas to be included in the definitions of "alternative fuel" and "alternative fuels tax."<br /> <br /> USE TAX<br /> <br /> Under present law, a use tax is imposed on compressed natural gas used for the propulsion of motor vehicles on the public highways of this state. For the purpose of determining the tax on compressed natural gas, a gallon equivalent factor of 5.66 pounds per gallon must be used. The rate of the tax imposed by this section must be:<br /> <br /> (1) On or after July 1, 2017, through June 30, 2018, 16 cents per gallon;<br /> <br /> (2) On or after July 1, 2018, through June 30, 2019, 18 cents per gallon; and<br /> <br /> (3) On or after July 1, 2019, 21 cents per gallon.<br /> <br /> This amendment imposes the use tax imposed on compressed natural gas on hydrogen gas. <br /> <br /> SALES AND USE TAX<br /> <br /> Under present law, every person is exercising a taxable privilege, subject to the sales and use tax, who: <br /> <br /> (1) Engages in the business of selling tangible personal property at retail in this state;<br /> <br /> (2) Uses or consumes in this state any item or article of tangible personal property, regardless of the ownership thereof or any tax immunity that may be enjoyed by the owner thereof;<br /> <br /> (3) Is the recipient of any of the things or services taxable under the sales and use tax law;<br /> <br /> (4) Rents or furnishes any of the things or services taxable under the sales and use tax law;<br /> <br /> (5) Stores for use or consumption in this state any item or article of tangible personal property;<br /> <br /> (6) Leases or rents such property, either as lessor or lessee, within this state;<br /> <br /> (7) Charges admission, dues or fees taxable under the sales and use tax law;<br /> <br /> (8) Sells space; <br /> <br /> (9) Charges a fee for subscription to, access to or use of television services provided by a video programming service provider;<br /> <br /> (10) Charges a fee for subscription to, access to or use of television services delivered by a provider of direct-to-home satellite service; or<br /> <br /> (11) Acts as a marketplace facilitator. <br /> <br /> The sale at retail, the use, the consumption, the distribution and the storage for use of consumption in this state of liquefied and compressed natural gas is exempt from the sales and use tax as described above. <br /> <br /> This amendment adds hydrogen gas to the list of tangible personal property exempt from the sales and use tax.<br />