2022 Federal Motor Fuel Excise Tax Rates and Credits
Federal motor fuel excise tax rates below include the 1/10th cpg non-refundable LUST tax imposed on both dyed and clear liquid fuel. There is no refund of the LUST tax. Tax exempt parties are required to pay the .001 cpg.
|
Product |
Rate |
Cents Per/Gal |
|
Gasoline |
$.184 |
18.4 cpg |
|
Gasoline (removed for alcohol blending) |
$.184 |
18.4 cpg |
|
Alcohol (for use in downstream gasoline blending) |
$.184 |
18.4 cpg |
|
Aviation Gasoline |
$.194 |
19.4 cpg |
|
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|
Biodiesel Blender’s Credit |
$1.00 |
100.0 cpg |
|
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|
Heating Oil |
$.001 |
1/10th cpg |
|
Diesel (clear) |
$.244 |
24.4 cpg |
|
Diesel (dyed) |
$.001 |
1/10th cpg |
|
Diesel (dyed used in trains)* |
$.001 |
1/10th cpg |
|
Diesel (removed for blending with biodiesel) |
$.244 |
24.4 cpg |
|
Diesel (used in certain intercity and local buses |
$0.17 |
17.0 cpg |
|
Biodiesel (removed for blending with diesel) |
$.244 |
24.4 cpg |
|
|
|
|
|
Kerosene (clear) |
$.244 |
24.4 cpg |
|
Kerosene (dyed) |
$.001 |
1/10th cpg |
|
Kerosene (clear - non-commercial aviation)** |
$.219 |
21.9 cpg |
|
Kerosene (clear - for use in non-taxable aviation) |
$.001 |
1/10th cpg |
|
Kerosene (clear - for use in commercial aviation not foreign trade) |
$.044 |
4.4 cpg |
|
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|
Alternative Fuels - On Highway Use in a Motor Vehicle |
|
|
|
Propane (liquefied propane gas) (gasoline gallon equivalent)*** |
$.183 |
18.3 cpg |
|
Compressed Natural Gas (CNG) (gasoline gallon equivalent)*** |
$.183 |
18.3 cpg |
|
Liquefied Natural Gas (diesel fuel gallon equivalent)*** |
$.243 |
24.3 cpg |
|
“P” Series Fuels |
$.184 |
18.4 cpg |
|
Liquefied Fuel (derived from biomass) |
$.244 |
24.4 cpg |
IMPORTANT! The 50 cent per gallon alternative fuel credit and alternative fuel mixture credit expire on December 31, 2021. However, the Build Back Better reconciliation bill that democrats aim to pass before the end of the year does include an extension of both credits through 2026.
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Oil Spill Liability Tax
The oil spill liability tax (OSLT) is $0.09 cents per barrel of crude. The OSLT expressed in cents per gallon (CPG) on finished product is as follows:
|
Finished Product |
Oil Spill Liability Tax Expressed in CPG |
|
|
|
|
Diesel Fuel |
$0.002143 cpg |
|
Biodiesel 5% |
$0.002036 cpg |
|
Biodiesel 20% |
$0.001714 cpg |
|
Gasoline 100% |
$0.002143 cpg |
|
Gasoline E10 |
$0.001929 cpg |
IMPORTANT! The OSLT is paid by refiners and passed downstream as a cost, not a tax. Some terminal operators break out the OSLT on product transfer documents for their own accounting purposes even though there is no requirement to do so. When downstream marketers break out the OSLT as a separate line item on customer invoices and/or contract bids, it looks like a tax. Tax exempt customers get confused when the OSLT is broken out as a separate line item and may mistakenly demand a refund or refuse to pay it.
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Notes
*This tax is paid by the railroads, NOT by the ultimate vendor.
** Marketers pay $.244 cpg at the rack, user’s rate is $.219. Ultimate vendor claim is 2.5 cpg. The ultimate vendor is the only party that can make the claim for 2.5 cpg. Ultimate vendor must have a certificate from the ultimate purchaser verifying the fuel is used for non-commercial aviation. Ultimate vendor must have an IRS 637 UA registration to file claim.
***For taxation purposes, one gasoline gallon equivalent (GGE) is equal to 5.75 pounds (lbs.) of propane and 5.66 lbs. of CNG. One diesel gallon equivalence (DGE) is equal to 6.06 lbs. of LNG. (Reference 26 U.S. Code 4041 and 4081).