Proposal Would Reduce Propane Tax

A group of state senators is pushing an amendment to a bill designed to ease some of the burden of rising propane costs. The amendment would eliminate sales tax on the fuel if it's purchased for more than $2.50 per gallon. January 28, 2014

News Release

STATEHOUSE, Ind. – State Sens. John Waterman (R-Shelburn), Doug Eckerty (R-Yorktown) and Jim Smith (R-Charlestown) are offering an amendment to Senate Bill 1 which would provide relief to Hoosiers who may be affected by the Midwest propane shortage.

The amendment would eliminate the sales tax on any propane bought for more than $2.50 per gallon. If passed into law, customers would get a credit on their next propane bill to offset the sales tax paid on any charge over $2.50 per gallon. Some customers are reporting current rates are in excess of $5 per gallon.

This credit would be retroactive to January and would be effective through March.

“The high demand for propane this winter has caused a number of issues for Hoosier families, especially those in rural areas,” Waterman said. “The price per gallon of propane has increased dramatically, and I hope this amendment can offer some much needed assistance to families who have been affected by the shortage.”

Sen. Brandt Hershman (R-Buck Creek), who authored SB 1, supports the amendment.

“This is an issue I take very seriously,” Hershman said. “In response to the propane crisis, I wrote to Governor Mike Pence's office and began exploring private-sector options for relief as well. I believe the amendment offered today will ease many of the concerns that propane consumers and lawmakers have voiced.”

The U.S Energy Information Administration reports that propane was selling for a historic high of $2.98 per gallon in Indiana on Jan. 20, but media reports indicate that prices have doubled that amount in some parts of the state this week.

Source: Indiana Senate Republican Caucus