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Fuel Tax Exemption for Propane and Natural Gas Vehicles
Washington State offers a state highway fuel tax exemption for liquefied petroleum gas (LPG) and compressed natural gas (CNG) vehicles. Owners of CNG and LPG powered vehicles are required to pay an annual fee, based on gross vehicle weight, instead of motor fuel excise taxes. These provisions are found in RCW 82.38.075. The fee is calculated as follows:
Vehicle Weight |
Base Fee |
Actual Fee |
| <10,000 lbs |
$ 45 |
$105.00 |
| 10,001 – 18,000 lbs |
$ 80 |
$186.67 |
| 18,001 – 28,000 lbs |
$110 |
$256.67 |
| 28,001 – 36,000 lbs |
$150 |
$350.00 |
| >36,000 lbs |
$250 |
$583.33 |
To determine the actual annual license fee, the appropriate dollar amount set out in the above schedule (base fee) shall be multiplied by the motor vehicle fuel tax rate in cents per gallon as established by RCW 82.36.025 effective on July 1st of the preceding calendar year and the product thereof shall be divided by 12 cents. In addition, there is a $5 handling fee in order to receive a CNG or LPG permit. Note: The current state fuel tax is 28 cents, with the Legislature voting in 2005 to raise the fuel tax over the next several years.
The annual license fee system provides vehicle operators the opportunity to save money on state fuel taxes through the use of CNG and LPG vehicles. For example, the current fee for a light-duty vehicle is $105.00. This is equivalent to paying $.28 per gallon fuel taxes for 375 gallons of fuel. Operators consuming more than 375 gallons of fuel annually will pay less in fuel taxes for CNG and LPG through the fee system than would have been paid for gasoline or diesel under the per gallon fuel tax.
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