Fuel Tax | Gasoline & Special Fuels

Gasoline

Gasoline and gasohol (gasoline mixed with ethyl alcohol) motor fuel taxes are due when acquired from a terminal and removed for distribution. Three tax-deferred transactions are allowed between Colorado licensed distributors after the fuel has left the terminal of origin. No more than three tax-deferred transactions are allowed. The tax is calculated on gross gallons acquired. The tax rate is 22 cents per gallon.

Special Fuels

The special fuel excise tax is due when acquired from a terminal and removed for distribution. Three tax-deferred transactions are allowed between Colorado licensed distributors. The tax is due on gross gallons acquired. The rate is 20.5 cents per gallon for all special fuels with the exception of liquefied petroleum gas (LPG), liquefied natural gas (LNG) and compressed natural gas (CNG). These fuels are taxed at a separate rate that changed annually from January 1, 2014 through 2019. For more information on the rate schedule, see Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) and Fuel Rates, visit the Compressed & Liquefied Gas web page.

Allowances

When reporting the acquisition of gasoline and special fuel and determining the amount of excise tax due, Colorado law provides for a 2 (two) percent allowance of the total amount of fuel to be deducted by the licensed distributor. The 2 percent allowance covers any losses in transit and in unloading the fuel and costs of collection. Out of this allowance, the licensed distributor shall make to each retailer an allowance of one percent of the amount of gasoline or special fuel delivered during each calendar month as shown by delivery invoices signed by the retailer.