Natural gas adoption vs. tax compliance

Avalara, Inc. has announced new survey results highlighting growing fuel and trucking business challenges related to natural gas tax compliance.

Tax regulations

Almost half the respondents are currently selling or using natural gas as a motor fuel. 67% claimed that staying current with the evolving natural gas tax regulations and rates is their biggest challenge.

The survey also shows that 32% of respondents currently selling or using natural gas are unaware that they may have state excise tax liability. Working with many of the largest fuel retail, distribution, and fleet companies in the US, Avalara’s Excise Tax Division provides automated solutions to help companies combat the complexity of natural gas tax determination and compliance.

Comments

Matt Tormollen, EVP/GM Avalara Excise Tax and CertCapture Divisions, commented: “With increased use of natural gas as a transportation fuel, companies are facing more and more tax compliance challenges. Adding to the extensive regulatory complexity is the fact that many companies use error-prone, manual processes to calculate or file natural gas motor fuel taxes. We are seeing more companies look to simplify and centralise natural gas tax processes with tax automation.”

Results

Natural gas usage is strong and is expected to rise over the next few years

• Natural gas is part of many companies’ current businesses as 32% of those surveyed are currently selling or using natural gas a motor fuel.
• 55% expect sales or usage of natural gas to increase in the next three years.

Future company business plans feature natural gas sales or usage

• 36% have it under review.
• 13% plan to adopt in the next 1-3 years.
• 5% plan to adopt in the next 3-5 years.

Natural gas sales and usage as a transportation fuel presents tax compliance challenges

• 67% of respondents who are currently selling or using natural gas consider their biggest challenge to be staying current with the evolving natural gas tax regulations for each state in which they operate.
• 32% of respondents were unaware that they may have state excise tax liability if they sell or use natural gas as a motor fuel.
• 38% were not aware that many states are actively considering new taxes for natural gas used as a motor fuel.

Calculating and filing natural gas motor fuel taxes is still an error-prone manual process for many

• 40% use spreadsheets to aggregate and summarise data when filing motor fuel taxes for natural gas.
• 23% percent manually calculate using calculator or spreadsheet to identify and calculate taxes charged to customers when selling natural gas as a motor fuel.

Avalara Excise Solutions

Avalara AvaTax Excise and Avalara Returns Excise automate the fuel excise tax calculation and filing process for transportation fuels, including natural gas. Avalara enables companies selling or using LNG, CNG, or propane (LPG) fuels to reduce filing costs and ensure tax compliance.

Adapted from press release by Katie Woodward

Read the article online at: https://www.lngindustry.com/small-scale-lng/18112014/avalara-survey-on-natural-gas-tax-compliance-1811/