The US Congress passed and the President signed the American Taxpayer Relief Act of 2012 on January 2nd, bringing into play a package of tax credit extensions for 2012 and 2013, which the Senate Finance Committee had previously passed. Importantly for the Natural Gas vehicle (NGV) industry, the tax credit extensions in the Act include the NGVAmerica-promoted tax credits for the sale of compressed natural gas (CNG) and liquefied natural gas (LNG) when used as a fuel for transportation and the tax credit for natural gas fueling equipment.
Specifically, the fuel credit provides incentives in the amount of 50 cents per gasoline gallon equivalent (GGE) of CNG and 50 cents per gallon of LNG. The infrastructure credit for business property is worth 30 percent of the cost of fueling infrastructure up to a maximum credit of $30,000 per station.
For residential home fueling units, the credit is worth 30 percent or a maximum of $1,000.
The amendments shall retroactively apply after December 31, 2011 and will remain in effect until December 31, 2013. NGVAmerica expects the IRS to issue guidance shortly describing how claims for 2012 should be made. In 2011, when Congress extended the credits and made the fueling credit retroactive for 2010, the IRS required claimants to make one claim for all of 2010, and they set an August 1 date for doing so.
NGVAmerica describes the tax credit extensions as a major victory for the industry and a great way to start off the New Year. For LNG, the fuel tax credit helps compensate for the federal LNG tax penalty. This gives the NGV industry all of 2013 to eliminate the penalty, which is high on our congressional agenda for this year. For CNG, the fuel tax credit will increase NGVs’ economic advantage and help accelerate demand.
The script of H.R. 8 is available from the Government website. Two sections specifically apply to alternative fuels:
- Sec. 402. Extension of credit for alternative fuel vehicle refueling property.
- Sec. 412. Extension of alternative fuels excise tax credits.