Local lawmaker's bill proposes temporary cut in state propane tax

News-DemocratFebruary 25, 2014 

A metro-east lawmaker has filed a bill that would reduce the state sales tax on propane during a three-month period this summer.

Rep. John Cavaletto, R-Salem, proposes lowering the tax from 6.25 percent to 1.25 percent from June 1 through Aug. 31.

Cavaletto said the tax cut would help businesses and homeowners who depend on propane for heating. They'll soon be buying propane during what is commonly known as the "summer fill" period, Cavaletto said.

"The tax reduction would take place during the summer months, but it would help businesses that utilize propane and, more importantly, individuals who have propane-fueled items such as stoves and water heaters, as well as assist with the cost of filling tanks in preparation for next fall and winter," Cavaletto said. "This will mean hundreds of dollars in savings for the average homeowner and possibly thousands of dollars for a business like a restaurant with just this three-month tax reduction."

The U.S. Energy Department, in a recent report, said propane was selling for an average of $3.89 a gallon nationally, up from an average price of $2.31 a year ago. Experts say two factors -- an unusually cold winter and a large, wet grain crop in the fall -- combined to drive up the demand for propane and cut the supply, resulting in higher prices. Propane is often used for drying crops.

Some state recently have declared emergencies due to high propane prices, suspending some transportation regulations such as limits on how long a propane delivery driver can operate a truck without taking a break.

Cavaletto's bill would apply to propane sales this summer only, not in future years.

According to the Energy Department, 5.5 million U.S. households heat with propane, mostly in the Midwest and South. Meteorologists with AccuWeather on Tuesday predicted that cold winter weather will remain for a few weeks in the Midwest, followed by a chillly spring.

Contact reporter Brian Brueggemann at bbrueggemann@bnd.com or 239-2511.

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