Motor Fuels Taxes consist of taxes on gasoline, liquefied petroleum, and special fuels (all combustible gases and liquids capable of being used in motor vehicles, except gasoline and liquefied petroleum).
Gasoline tax is levied on the average wholesale price per gallon as determined by KRS 138.228. The tax becomes a liability of the dealer when the gasoline is received or enters the dealer's storage facility.
Liquefied petroleum gas consists of any material which is composed predominately of any of the following hydrocarbons, or mixtures of them, whether in liquid or gaseous states: propane, propylene, butane (normal and isobutane), and butylene, and which is used to propel vehicles of any kind on public highways. The tax is levied when it is determined to have been used to propel motor vehicles on public highways.
Special fuels tax including diesel fuel is levied on the dealer at the point of receipt of the fuels instead of the point of sale by the dealer.
Unlike most taxes collected by the Department of Revenue, motor fuels taxes are deposited in the Road Fund as directed by the Kentucky Constitution and are appropriated by the General Assembly for the construction and maintenance of Kentucky's roads.
Motor Fuels tax laws are found in
Chapter 138 of the Kentucky Revised Statutes.