2021 Federal Motor Fuel Excise Tax Rates
There are several changes to the 2021 federal motor fuel excise tax rates you should be aware of–
— Oil Spill Liability Tax Extended – The federal Oil Spill Liability Tax (OSLT) set to expire on December 31, 2020 is extended through December 31, 2025. Refiners pay the $0.09 cents per barrel of crude oil tax and pass it down the distribution chain as a cost. OSLT is a cost and not a tax below the refinery gate.
— Alternative Fuel Mixture Credit Extended – The federal Alternative Fuel Mixture Credit set to expire on December 31, 2020 is extended through December 31, 2021. The credit is 50 cents per gallon of alternative fuel used to produce a mixture containing at least 0.1 percent gasoline, diesel, or kerosene. Qualified alternative fuels are liquefied hydrogen, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and liquid fuel derived from biomass.
— Expiration of COVID-19 Commercial Aviation Kerosene Tax Holiday – The 4.4 cpg federal excise tax for kerosene used in commercial aviation is reinstated on January 1, 2021.