MS HB1654

Reduces the sales tax rate from 7% to 1.5% on electricity, power, steam, coal, natural gas, liquefied petroleum gas, and other fuel sold to oil and gas producers for use directly in enhanced oil recovery using carbon dioxide and/or permanent sequestration of carbon dioxide in geological formations.

Applies the 1.5% industrial rate to naturally occurring and anthropogenic carbon dioxide lawfully injected into the earth for enhanced oil recovery projects (including cycling, repressuring, or lifting of oil) or permanent geological sequestration.

Aligns the tax treatment of energy used in enhanced oil recovery and carbon dioxide sequestration with existing 1.5% industrial rates already applied to manufacturers, custom processors, and certain agricultural operations.

Effective date: July 1, 2012.