Alternative Fuel Infrastructure Tax Credit

Fueling equipment for natural gas, liquefied petroleum gas (propane), electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed between January 1, 2006, and December 31, 2013, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchased qualified residential fueling equipment prior to December 31, 2013, may receive a tax credit of up to $1,000. Unused credits that qualify as general business tax credits, as defined by the Internal Revenue Service (IRS), may be carried backward one year and carried forward 20 years. (Reference Public Law 112-240 and 26 U.S. Code 30C and 38)

Alternative Fuel Excise Tax Credit

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: compressed natural gas (based on 121 cubic feet), liquefied natural gas, liquefied petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. 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. This tax credit is applicable to fuel sold or used between January 1, 2005, and December 31, 2013. (Reference Public Law 112-240 and 26 U.S. Code 6426)

Alternative Fuel Mixture Excise Tax Credit

An alternative fuel blender that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive on the sale or use of the alternative fuel blend (mixture) for use as a fuel in the blender's trade or business. The credit is in the amount of $0.50 per gallon of alternative fuel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene. Qualified alternative fuels are: compressed natural gas (based on 121 cubic feet), liquefied natural gas, liquefied petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. The incentive must first be taken as a credit against the blender'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.This tax credit is applicable to fuel sold or used between January 1, 2005, and December 31, 2013. (Reference Public Law 112-240 and 26 U.S. Code 6426)

Alternative Fuel Tax Exemption

Alternative fuels used in a manner that the Internal Revenue Service (IRS) deems as nontaxable are exempt from federal fuel taxes. Common nontaxable uses in a motor vehicle are: on a farm for farming purposes; in certain intercity and local buses; in a school bus; exclusive use by a nonprofit educational organization; and exclusive use by a state, political subdivision of a state, or the District of Columbia. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuel. For more information, see IRS Publication 510, which is available via the IRS website.

Improved Energy Technology Loans

The U.S. Department of Energy (DOE) provides loan guarantees through the Loan Guarantee Program (Program) to eligible projects that reduce air pollution and greenhouse gases, and support early commercial use of advanced technologies, including biofuels and alternative fuel vehicles. The Program is not intended for research and development projects. DOE may issue loan guarantees for up to 100% of the amount of the loan for an eligible project. For loan guarantees of over 80%, the loan must be issued and funded by the Treasury Department's Federal Financing Bank. For more information, see the Loan Guarantee Program website. (Reference 42 U.S. Code 16513)

Advanced Biofuel Feedstock Incentives

The Biomass Crop Assistance Program (BCAP; Section 9010) provides financial assistance to landowners and operators that establish, produce, and deliver biomass feedstock crops for advanced biofuel production facilities. Qualified feedstock producers are eligible for a reimbursement of 75% of the cost of establishing a biomass feedstock crop, as well as annual payments for up to five years for herbaceous feedstocks and up to 15 years for woody feedstocks. The annual payment values are determined based primarily on the crop value; producers receive 99% of the value if the biomass is harvested to produce cellulosic biofuels that meet the U.S. Environmental Protection Agency's Renewable Fuels Standard Program standards, 90% if it is harvested for other advanced biofuels, and 75% if it is harvested for heat, power, or biobased products. In addition, BCAP provides qualified biomass feedstock crop producers matching payments for the collection, harvest, storage, and transportation of their crops to advanced biofuel production facilities for up to two years. The matching payments are $1 for each $1 per dry ton paid by a qualified advanced biofuel production facility, up to $45 per dry ton. For more information, see the Biomass Crop Assistance Program website. (Reference 7 U.S. Code 8111)