Thursday, June 19, 2008

E85 does not pay Indiana excise tax

It looks like E85 is exempt from Indiana state excise taxes (18 cents per gallon).

But the retailer has to collect the tax and then apply for a credit. And it looks like there is a $1M limit to how much all E85 retailers can deduct.

See here.

I verified that Indiana charges sales tax on gas purchases. The sales tax in Indiana was recently jacked up to 7%.

So we're back to $3.13 a gallon for E85. Meijer is still charging $3.52 a gallon.

5 comments:

Anonymous said...

I wondered what happened to Indiana gas prices over the last year or so- a 7% gas tax would explain this. I used to plan on filling up at the Flying J in the "Circle City" when coming down from Wisconsin- I could usually buy gas for 10-15 cents less than in WI. but I guess those days are gone until WI raises taxes again. Here the state tax is same for gas, E85, and diesel regardless of energy content. We pay 18.4 federal and 31.9 state here.

Alcohol

buzzcut said...

Al, the 7% tax certainly has something to do with that price increase.

However, I wonder if the Chicago area is supply constrained. If so, perhaps the cost across the region tends to converge, no matter what the tax rate in the local area.

I don't really understand any other explanation why prices in Indiana have convered with those in Cook County, which they have.

Anonymous said...

To my knowledge this is the first summer in several years that BP in Whiting or Mobil in Joliet have not had any issues. Even Wood River near St. Louis has been running smooth. While these refineries may be having some issues they have been very quiet about it and the OPIS RBOB Chicago spot is running at only 1/2 cent over NY Merc-- conventional NL (not sold in your area) is running 11 1/2 cents under the Merc. Compared to the past several years these are unheard of low basis values. A few years ago when Citgo had a fire and had to shut down in the Chicago area and Amoco played games with scheduling their Whiting turnaround the basis roared up to PLUS 50 cents over the Merc. I am glad at least this year that BP got Whiting bandaided well enough to get us to this point. Whiting is so huge in terms of output compared to typical refinery size and such a large % of supply- even one compressor fire puts the upper midwest in a bind. Resupply via refined pipelines from the Gulf takes no less than 30-40 days to even attempt holding status quo let alone rebuilding a cushion. This was the cause of the past several years basis blowouts.

Alcohol

Anonymous said...

Buzz- are you saying that on gasoline Indiana charges both 18 cents and 7%? If so- WOW- you should soon expect major road and bridge improvements LOL. If this is the case and when you add 12 cents for RBOB over NL gas then this explains fully your high costs. With RBOB (base gas for RFG before alcohol is added) running at 12 over gas then it is pretty clear that lower cost ethanol will not offset more than making the price equal. Sad !. Especially since RBOB is also suboctane.

Alcohol

buzzcut said...

Yes, there is a gas tax in Indiana AND we pay sales tax on gas. Same as Illinois, to the best of my knowledge.

You KNOW that the sales tax doesn't go to infrastructure!