New Legislation Part 2 – Special Taxes

Dec. 11, 2013 – TaxTalk Blog

Aviation fuel tax, special fuel tax, and gasoline use tax, oh my! You may not know the department administers more than 21 special taxes, ranging from an aircraft license excise tax to a petroleum severance tax. This past legislative session brought changes to many of Indiana’s special taxes. With tax season 2014 around the corner, let’s review the special tax legislation that affects the upcoming New Year.

Some key special tax legislation is effective beginning in 2014 and will soon affect Hoosier businesses. Beginning January 1, 2014:

  • Truck stop owners must obtain a truck stop owner’s license from the department.
  • Liquefied and compressed natural gases are added to the legal definition of alternative fuel, and alternative fuels will be considered special fuel.
  • A special fuel tax of $.16 per gallon will be applied to the diesel gallon equivalent for liquefied natural gas (LNG) and the gasoline gallon equivalent for compressed natural gas (CNG).
  • A motor carrier fuel use tax, and use tax surcharge tax, will be imposed on vehicles using liquefied natural gas or compressed natural gas.

Later in 2014 the legislation will affect gasoline sales. Beginning July 1, 2014:

  • Indiana retail merchants will no longer be obligated to collect sales tax on gasoline sales.
  • Qualified distributors, refiners, or terminal operators will be required to collect and remit gasoline use tax to the department. The use tax rate will be calculated monthly based on 7 percent of the statewide average retail price of gasoline.

If you really want to dig into all the state tax laws that begin in 2014, check out the 2013 Synopsis of Legislation Affecting the Indiana Department of Revenue. Here you’ll find a summary of the 2013 changes/updates by both topic and tax type (such as individual income tax, sales tax, withholding tax, etc.)

And stay tuned for Part 3 in our New Legislative Series – Individual Tax Changes.

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