(a) Subject to exemptions provided in part 4 of this chapter, and except as provided in subsection (c), a use tax is imposed upon all diesel fuel and all fuel other than gasoline that is suitable for use in a diesel-powered vehicle or that is used or consumed in this state to produce power for propelling motor vehicles; it being the purpose and intent of this section that the taxes being levied on taxable motor fuels under this chapter are in fact a levy and assessment on the consumer, and the levy and assessment on other persons as specified in this chapter are as agents of the state for the collection of such tax. The rate of the tax imposed by this section shall be:
Terms Used In Tennessee Code 67-3-202
Diesel fuel: means any liquid that is commonly or commercially known or sold as a fuel that is suitable for use in a diesel-powered highway vehicle. See Tennessee Code 67-3-103
Gasoline: means all products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel, but does not include any product that is sold as a product other than gasoline and has an ASTM octane number of less than seventy-five (75) as determined by the "motor method". See Tennessee Code 67-3-103
In this state: means the area inside the boundaries of Tennessee, but does not include the midstream of waterways that border the state. See Tennessee Code 67-3-103
(1) On or after July 1, 2017, through June 30, 2018, twenty-one cents (21¢) per gallon;(2) On or after July 1, 2018, through June 30, 2019, twenty-four cents (24¢) per gallon; and(3) On or after July 1, 2019, twenty-seven cents (27¢) per gallon.(b) The tax imposed by this section shall be collected and paid at those times, in the manner, and by those persons specified in this chapter.(c) Notwithstanding subsection (a), diesel fuel that is indelibly dyed in accordance with internal revenue service regulations and is legal for exempt use only shall not be considered subject to the diesel tax imposed under this section, except when used by a commercial carrier to produce power for a means of transportation, as defined in the Transportation Fuel Equity Act, compiled in part 14 of this chapter, in which case a use tax of seventeen cents (17¢) per gallon is imposed on such fuel.
