Alabama natural gas public sellers and fleet producers will be required to get a license and post a surety bond following HB 333‘s passage. The new law takes effect on October 18, 2018.
Alabama natural gas public sellers operate service stations where compressed or liquefied natural gas�CNG or LNG� are sold to the public for use in vehicles. Fleet producers produce the CNG or LNG. HB 333 also creates a license for sellers and producers and a system for licensing natural gas.
HB 333 requires Alabama natural gas public sellers and fleet producers to apply for licensure through the Department of Revenue. In order to become licensed, applicants must submit a $50 application fee plus $25 for each additional business location. Sellers and producers must also obtain a surety bond that is $25,000 or approximately twice the seller or producer’s average monthly tax liability.
HB 333’s effective date will also bring a new excise tax on CNG and LNG. An excise tax of $.08 per diesel or gasoline gallon equivalent (DGE or GGE) will take effect on October 1, 2018.�On October 1, 2023, the excise tax will increase to $.13 per DGE or GGE. In lieu of the excise tax for personal producers of CNG, the state will assess a $100 application fee to be paid each year by January 20, beginning January 1, 2019.
The excise tax levied on Alabama natural gas public sellers and fleet producers brings about the surety bond requirement, since the bond is a guarantee that sellers and producers pay their taxes on time and as required. The surety bond amount will be reviewed by the Department every five years after January 2023 to ensure every seller and producer’s bond amount is sufficient.
Alabama natural gas public sellers and fleet producers must pay their taxes before the 20th of each month for the previous month, to be submitted with a report detailing the amount of CNG and LNG sold.
Ready to get an Alabama surety bond? Single Source Insurance can help! Get in touch and get a quote today.