Alternative Fuel Incentives and Law

    Federal Tax Credit Updates

    $0.50 per gallon tax credit extended retroactively for biofuels, Natural Gas and Propane

    A tax incentive is available for alternative fuel that is sold for use or used as a fuel to operate a motor vehicle. A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: natural gas, liquefied hydrogen, propane, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. For propane and natural gas sold after December 31, 2015, the tax credit is based on the gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE). For taxation purposes, one GGE is equal to 5.75 pounds (lbs.) of propane and 5.66 lbs. of compressed natural gas. One DGE is equal to 6.06 lbs. of liquefied natural gas.

    For an entity to be eligible to claim the credit they must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Tax-exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive. Eligible entities must be registered with the Internal Revenue Service (IRS). The incentive must first be taken as a credit against the entity's alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits.

    For more information about claiming the credit, see IRS Form 4136, which is available on the IRS Forms and Publications website. (Reference Public Law 116-94, Public Law 115-123, Public Law 114-113, and 26 U.S. Code 6426)

    To learn more about how the tax credit extension affects propane, see the National Propane Gas Association Fact Sheet.

    The bill extends key alternative fuel tax incentives that have been expired since the end of 2017. Specifically, it extends:

    • the $1.00-per-gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon, retroactively for 2018 and 2019 and prospectively through 2022;
    • the alternative fuel excise credit retroactively for 2018 and 2019 and through 2020;
    • the alternative fuel infrastructure credit retroactively for 2018 and 2019 and through 2020; and
    • the credit for qualified fuel cell vehicles retroactively for 2018 and 2019 and through 2020.

    The bill also:

    • includes $40 million for the DOE Clean Cities program – a nearly $3 million increase over last year;
    • includes $87 million for the EPA Diesel Emission Reduction grants; and
    • requires the Federal Highway Administration to approve all clean vehicle projects submitted prior to April 17, 2018, using the previous criteria (final assembly in the United States) and it directs the agency to review and respond to Buy America waiver requests within 60 days of submission.

    READ MORE on our blog

    Electric vehicle tax credit phasing out for some manufacturers - EV Tax credits not extended for GM and Tesla

    The federal Internal Revenue Service (IRS) tax credit for electric vehicles is for $2,500 to $7,500 per new EV purchased for use in the U.S. The size of the tax credit depends on the size of the vehicle and its battery capacity. To find out specific tax credit amounts for individual vehicles, visit FuelEconomy.gov’s Tax Credits for Electric Vehicles and Tax Credits for Plug-in Hybrids pages. This tax credit will be available until 200,000 qualified EVs have been sold in the United States by each manufacturer, at which point the credit begins to phase out for that manufacturer. Currently, no manufacturers have been phased out yet, except Tesla which will phase out December 31, 2019 and GM which will phase out on March 31, 2020.

    To claim the credit, fill out IRS Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit. For vehicles acquired for personal use, report the credit from Form 8936 on the appropriate line of your Form 1040, U.S. Individual Income Tax Return. For vehicles purchased in 2010 or later, this credit can be used toward the alternative minimum tax (AMT). To learn more about the law, visit the IRS’s Plug-in Electric Drive Vehicle Credit webpage.


    Louisiana Tax Credits, Laws and incentives

    Alternative Fuel Credit Department of Revenue Tax Administration Division Rule

    Alt Fuel Vehicle Purchases: CHANGES EFFECTIVE JANUARY 1, 2018

    Credit is Classified as Nonrefundable

    Act 325 changes the credit to nonrefundable for all purchases of qualified clean-burning motor vehicle fuel property on or after January 1, 2018. Credits for the purchase of qualified clean-burning motor vehicle fuel property made before January 1, 2018, remain refundable.

    Sunset Provision

    Act 403 provides for a sunset date for the credit of January 1, 2022. Accordingly, purchases made on or after this date will not be eligible for the alternative fuel vehicle tax credit.

    For questions concerning this matter, please contact the Policy Services Division at (225) 219- 2780. For questions concerning a taxpayer’s return, please contact (855) 307-3893.


    Alt Fuel vehicle Purchases: CHANGES EFFECTIVE JUNE 26, 2017

    Calculation of Credit Changed for New Motor Vehicle Purchases

    Act 403 changed the credit for purchases of new motor vehicles to ten percent of the cost of the qualified motor vehicle or $2,500, whichever is less, provided that the motor vehicle is registered in Louisiana.


    Alt Fuel vehicle conversions & stations:  Changes EFFECTIVE JUNE 22, 2017

    Reduced Credit Amount for Conversions and Fueling Stations

    Act 325 permanently reduces the credit from 36 percent to 30 percent of the cost of the qualified clean-burning motor vehicle fuel property being purchased to (1) convert vehicles propelled by gasoline or diesel to an alternative fuel or (2) build fueling stations.

    Qualified Costs for Fueling Stations Clarified

    Act 325 clarifies that the costs associated with fueling station infrastructure that are not directly related to the delivery of an alternative fuel into the fuel tank of motor vehicles are not eligible for the credit.

    New Registration and Use Requirements for Credits for Converted Commercial Vehicles

    Pursuant to Act 325, in order to be eligible for the credit for costs associated with converting a vehicle to alternative fuel usage, commercial vehicles must be registered and primarily used in Louisiana for four years after the date of the conversion. For purposes of this requirement, a commercial vehicle is deemed primarily used in Louisiana when 80% of the miles traveled in the four years after the conversion occurs in Louisiana.

    Alt Fuel vehicle Purchases:  Changes EFFECTIVE JUNE 22, 2017

    Calculation of Credit Changed for New Motor Vehicle Purchases

    For new motor vehicles originally equipped to be propelled by an alternative fuel, Act 325 eliminates the option of determining the exact cost that is attributable to the alternative fuel property. Instead, the amount of the credit for purchases of new motor vehicles is now equal to 7.2 percent of the cost of the qualified motor vehicle or $1,500, whichever is less, provided that the motor vehicle is registered in Louisiana.

     


    State Excise tax: CHANGES EFFECTIVE JANUARY 1, 2016

    CHANGES TO THE SPECIAL FUELS EXCISE TAX - ACT 147:

    Act 147 Beginning January 1, 2016, LDR discontinued the annual decal program and instead collect a special fuels tax of $0.16 per gallon equivalent of natural gas at the time fuel is dispensed or delivered into the tank of a motor vehicle based on the special fuel's energy content as follows:

    1. Diesel gallon equivalent for liquefied natural gas (LNG) is equal to 6.060 lbs. of LNG.
    2. The gasoline gallon equivalent for propane (LPG) shall be energy equivalent rate equal to 73% percent of the state tax per gallon on gasoline and diesel fuel.
    3. Gasoline gallon equivalent for compressed natural gas (CNG) is equal to 5.660 lbs. of CNG.
    • Decals will continue to be issued through Dec. 31, 2015, for vehicles that use special fuels in order for the taxes due on the fuel to be paid. The amount of the decal is being calculated at a rate of one-twelfth of the total annual decal amount for each month the decal is valid. Refunds will be issued starting in January 2016 for renewals & new applications.
    • Dealers must register with LDR and post a $50,000 bond or an amount equal to 3 months’ tax liability, whichever is greater. 
    • R.S. 47:818.112 requires the tax to be collected by any person or entity upon the delivery of the fuel into the fuel supply tank of a motor vehicle. R.S. 818.112(B) imposes the tax on the delivery of fuel into the supply tank of a motor vehicle by a special fuel fleet dealer or other dealer not in connection with a sale. 
    • The return is due by the 20th of the month.
    • Licensed dealers are entitled to a 1/3 of 1% discount for the expense of collecting, accounting for, reporting and timely remitting the taxes collected and for keeping records.
    • For gasoline and diesel--Reduces the administrative discount to the supplier for filing returns and remitting payment timely from one and one-half percent to one-half percent and reduces the deduction from 1% to one-third of 1% for licensed distributor or importer. See RIB 15-022.


    Questions about Act 147 can be directed to Shanda McClain 225-219-2780 or the Policy Services Excise email address: [email protected]


    Autonomous Vehicle legislation

    Louisiana HB 1143 (2016) Defines "autonomous technology" for purposes of the Highway Regulatory Act.
    Louisiana HB 308 (2018) Defines "Platoon" or "platooning" to mean a group of individual motor vehicles, including any truck, truck-tractor, trailer, semitrailer, or any combination of these vehicles, utilizing vehicle-to-vehicle communication technology to travel in a unified manner at close following distances. A platoon may be operated if the platoon operator submits an operational plan. The plan must be approved by the Department of Public Safety and Corrections, office of state police, and the Department of Transportation and Development and the same agencies may promulgate rules to implement these provisions. The provisions of this bill do not apply to the operation of a non-lead motor vehicle in a platoon. The operation of a platoon is not authorized on a two-lane highway.
    Louisiana HB 455 (2019)

    Defines "automated driving system" as the hardware and software that are collectively capable of performing the entire dynamic driving task on a sustained basis, regardless of whether it is limited to a specific operational design domain. Defines "autonomous commercial motor vehicle" as a motor vehicle used in commerce and equipped with an automated driving system, including those designed to function without a driver. “Commerce" is defined as transportation for the purpose of compensation, remuneration, employment, trade, or payment of anything of value and “commercial motor vehicle" as a motor vehicle or combination of motor vehicles used in commerce to transport passengers or property if the motor vehicle has a gross combination weight rating of 26,001 or more pounds inclusive of a towed unit with a gross vehicle weight rating of more than 10,000 pounds.

    Authorizes autonomous commercial motor vehicles to operate without a conventional driver physically present in the vehicle if the autonomous commercial motor vehicle meets all of the following criteria: (1) Is capable of operating in compliance with applicable federal law and the traffic and motor vehicle laws including but not limited to applicable laws concerning the capability to safely navigate and negotiate railroad crossings. (2) Is properly registered and titled. (3) Is certified in accordance with federal law as being in compliance with federal motor vehicle safety standards and bears the required certification label or labels. (4) Is capable of achieving a minimal risk condition if a failure occurs rendering the vehicle unable to perform the dynamic driving task-relevant to its intended operational design domain or if the vehicle exits its operational design domain. (5) Is covered by motor vehicle liability coverage in an amount not less than $2,000,000.

    Provides that autonomous commercial motor vehicles and automated driving systems are governed exclusively by new law and the department of transportation and development is the sole agency with jurisdiction over autonomous commercial motor vehicles and automated driving systems. Requires a person or entity to submit a written statement to the department certifying that the vehicle meets the requirements of new law prior to commencing the operation of an autonomous commercial motor vehicle without a conventional driver present in the cab. For a commercial motor vehicle equipped with a teleoperation system without a conventional driver present in the cab, an owner, a remote driver, or the remote driver's employer shall submit a written statement to the Department of Transportation and Development certifying that the vehicle meets the requirements.

    Specifies that when a remote driver is operating a commercial motor vehicle equipped with a teleoperation system, the remote driver will be considered the operator of the vehicle for the purpose of assessing compliance with applicable traffic or motor vehicle laws, including the rules of the road. Requires that the remote driver hold the proper class of license required for a conventional driver to operate the vehicle.

    Requires that an autonomous commercial motor vehicle or a commercial motor vehicle equipped with a teleoperation system remain at the scene of an accident and the operator or any person on behalf of the operator shall comply with the provisions of existing law relative to contacting the appropriate law enforcement agency and furnishing all relevant information if an accident occurs.

     


    STATE MANDATE

    ALTERNATIVE FUEL AND ADVANCED VEHICLE ACQUISITION REQUIREMENTS:

    The Louisiana Division of Administration must purchase dedicated alternative fuel vehicles (AFVs) capable of operating on natural gas or liquefied petroleum gas (propane), or bi-fuel vehicles capable of operating on conventional fuel or natural gas, propane, or any non-ethanol advanced biofuel. State agency vehicles may be granted a waiver if fueling stations are not available within a 25-mile radius, the agency cannot recoup the incremental cost of the vehicle within 60 months, or the available vehicles do not meet agency specifications. 

    Any AFV a state agency purchases or leases must have a minimum fuel economy of 18 miles per gallon (mpg) for city driving, 28 mpg for highway driving, or a combined city/highway average of 24 mpg. Law enforcement vehicles, certified emergency vehicles, and state agency vehicles with prior written authorization are exempt from this requirement. (Reference Louisiana Revised Statutes 39:364 and 39:1646)

    Federal Tax Incentives by Car make and model: Fueleconomy.gov
    AFDC's Website: Federal & State Incentives Search
     Funding Opportunities
     LDNR's Website: Louisiana Alternative Fuel Incentives and Laws