Tulsa Clean Cities

Tax Incentives

 

 

One of the main objectives of the Tulsa Area Clean Cities Coalition is to make our stakeholders aware of funding opportunities and partnerships. Our goal is to be an informative resource to assist you in facilitating your alternative fuel projects.

 

Oklahoma Tax Credits & Rebates


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Alternative Fuel Vehicle (AFV) Tax Credit
Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Tax Credit
Biodiesel Production Facility Tax Credit
Ethanol Production Tax Credit
Ethanol Fuel Retailer Tax Credit
Biofuels Tax Exemption
Natural Gas Vehicle (NGV) Promotion

 

Federal Tax Credits & Incentives

Alternative Fuel Tax Credit
Alternative Motor Vehicle Credit
Alternative Fuel Infrastructure Tax Credit
Hybrid Motor Vehicle Credit
Biodiesel and Ethanol (VEETC) Tax Credit
Qualified Plug-In Electric Drive Motor Vehicle Tax Credit

 

Helpful Websites and Contacts

Disclaimer: The information on this page should not be viewed as an official or legally binding document.  Other requirements or exceptions may apply.  For more detailed information, please consult a qualified tax representative and/or official Tax Commission publications.


Oklahoma Tax Credits

Alternative Fuel Vehicle (AFV) Tax Credit

For tax years beginning before January 1, 2020, a one-time income tax credit is available for 45% of the incremental cost of purchasing a new original equipment manufacturer AFV, excluding electric vehicles, or converting a vehicle to operate on an alternative fuel. The state also provides a tax credit for 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. Equipment used for conversions must be new; must not have been previously used to modify or retrofit any vehicle; must meet applicable federal and state safety standards; and must be installed by a state certified alternative fuels equipment technician. The alternative fuels eligible for the credit are compressed natural gas, liquefied natural gas, hydrogen, and liquefied petroleum gas (propane). Tax credits may be carried forward for up to five years. (Reference House Bill 1718, 2013; House Bill 2005, 2013; and Oklahoma Statutes 68-2357.22)

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Alternative Fueling Infrastructure Tax Credit

For tax years beginning before January 1, 2020, the state provides a tax credit for up to 75% of the cost of installing alternative fueling infrastructure. Eligible alternative fuels include compressed natural gas (CNG), liquefied natural gas, liquefied petroleum gas (propane), and electricity. Infrastructure related to the delivery of hydrogen into the tank of a motor vehicle is eligible for the 2010 tax year only. The infrastructure must be new and must not have been previously installed or used to fuel alternative fuel vehicles. A tax credit is also available for up to 50% of the cost of installing a residential CNG fueling system, for up to $2,500. The tax credit may be carried forward for up to five years. (House Bill 3024, 2010, and Oklahoma Statutes 68-2357.22)

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Biodiesel Production Facility Tax Credit

For tax years beginning after December 31, 2004 and before January 1, 2013, a biodiesel (B100) production facility is allowed a credit of $0.20 per gallon of biodiesel produced. An eligible biodiesel facility must produce at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit, on or before December 31, 2008. The credit is allowed for 60 months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2012. An eligible facility may also receive a credit of $0.20 per gallon for biodiesel produced in excess of the original nameplate design capacity which results from expansion of the facility completed on or after the effective date of this act and before December 31, 2008. Beginning January 1, 2013, a biodiesel facility may receive a credit of $0.075 per gallon of biodiesel, for new production for a period not to exceed 36 consecutive months. Additional restrictions apply. (House Bill 1513, 2007, and Oklahoma Statute 68-2357.67)

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Ethanol Production Tax Credit

For tax years beginning after December 31, 2003 and before January 1, 2013, an ethanol production facility is allowed a tax credit in the amount of $0.20 per gallon of ethanol produced, for 60 months beginning with the first month for which the facility is eligible to receive such credit. The credit may only be claimed if the ethanol facility maintains an average production rate of at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit, on or before December 31, 2010. Producers are also eligible for an expansion credit of $0.20 per gallon of ethanol produced in excess of the original nameplate capacity that results from expansion of the facility before December 31, 2008. Beginning January 1, 2013, an ethanol facility is eligible for a credit of $0.075 per gallon of ethanol, before denaturing, for new production for a period not to exceed 36 consecutive months. (House Bill 1513, 2007, and Oklahoma Statute 68-2357.66)

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Ethanol Fuel Retailer Tax Credit

A retailer of ethanol-blended fuel (blended gasoline consisting of not more than 15% ethyl alcohol by volume) may claim a motor fuel tax credit of $0.016 for each gallon of ethanol fuel sold in Oklahoma, if the retailer provides a price reduction to the purchaser of the ethanol fuel in the same amount. This incentive is effective unless the federal government mandates the use of reformulated fuel in an area within the State of Oklahoma that is in non-attainment with the National Ambient Air Quality Standards. (Oklahoma Statute 68-500.10-1)

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Biofuels Tax Exemption

Biofuels or biodiesel produced by an individual with feedstocks grown on property owned by the same individual and used in a vehicle owned by the same individual on public roads and highways are exempt from the state motor fuel excise tax. (House Bill 1916, 2007, and Oklahoma Statutes 68-500.4 and 68-500.10)

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Natural Gas Vehicle (NGV) Promotion

The Oklahoma State legislature urges the U.S. Environmental Protection Agency to take regulatory steps that will encourage the use of NGVs. Recommended steps include revising and streamlining aftermarket conversion certification requirements for small volume manufacturers; waiving requirements for re-certifying natural gas engine conversion kits if the kit has been previously certified for a vehicle model and neither the kit nor the specific vehicle model have substantially changed; providing additional guidance to small volume manufacturers regarding conversion of older vehicle models; and continuing NGV research, development, and demonstration. (House Concurrent Resolution 1019, 2009)

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Federal Tax Incentives



Alternative Fuel Tax Credit – This tax credit has expired, but Congress is working to extend it.

(Internal Revenue Code (IRC), §§ 6426, 6427)  Current law provides a 50 cent tax credit for CNG (per 121 cubic feet) or LNG gallon when used as a transportation fuel.  Credit extended to 12/31/2011 by Pub. L. No. 111-312 (Dec. 2010); credit made retroactive for 2010.

Update: 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)

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Alternative Motor Vehicle Credit

This tax credit has expired, but Congress is working to extend it.
Section 1341 of the Energy Policy Act of 2005 provides a tax credit to buyers of new alternative fuel vehicles placed in service as an alternative fuel vehicle after January 1, 2006. The legislation provides for a tax credit equal to 50% of the incremental cost of the vehicle, plus an additional 30% of the incremental cost for vehicles with near-zero emissions (SULEV or Bin 2 for vehicles <14,001 lb GVWR). The IRS has issued two notices to establish rules for manufacturers and qualified vehicle buyers to claim the credit. A Tax Credit Table has information on certified vehicles and available credits.

The credit is available on the purchase of light-, medium-, and heavy-duty vehicles and fuel-cell, hybrid, and dedicated natural gas, propane, and hydrogen vehicles. Light-duty lean-burn diesel vehicles are also eligible.

Vehicles are subject to the following incremental cost limitations:

  • $5,000: 8,500 GVWR or lighter
  • $10,000: 8,501 – 14,000 GVWR
  • $25,000: 14,001 – 26,000 GVWR
  • $40,000: 26,001 GVWR and heavier

For non-tax-paying entities, the credit can be passed back to the vehicle seller. The tax credit can be applied to vehicle purchases made after December 31, 2005. The credit expires December 31, 2010.

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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 Section 402 and 26 U.S. Code 30C and 38)

The initial credits expired, but the above extended many of the provisions through December 31, 2013.
Section 1342 of the Energy Policy Act of 2005 provides a tax credit equal to 30% of the of cost alternative refueling property, up to $30,000 for business property. Qualifying alternative fuels are natural gas, propane, hydrogen, E85, or biodiesel mixtures of B20 or more. Buyers of residential in-home refueling equipment can receive a tax credit for $1,000. For non-tax-paying entities, the credit can be passed back to the equipment seller. The credit is effective on equipment put into service after December 31, 2005. It expires December 31, 2009 (hydrogen property credit expires in 2014).

This legislation also extends the Tax Deduction Timeline that was established by EPAct 1992, Section 179, and extended by the Working Families Tax Relief Act of 2004.

In May 2006, the Internal Revenue Service (IRS) published Form 8911, which provides a mechanism to claim the infrastructure tax credit. Owners who install qualified refueling property on multiple sites can utilize the credit for each property. The instructions define what is considered qualified property and the value of the credit. See IRS Form 8911.

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Hybrid Motor Vehicle Credit

This tax credit has expired.
Section 1341 of the Energy Policy Act of 2005 provides a tax credit for light-duty hybrid vehicles (<8,501 lb GVWR) based on their improved fuel economy and their life-time fuel savings potential. The IRS will certify vehicles for the credit and publish qualifying credit amounts as vehicles are certified. The Current Tax Credit Table has the most recent information from the IRS.

The fuel economy portion of the credit is based on the following efficiency gains over model year 2002 baselines.

  • 125%-149%: $400
  • 150% -174%: $800
  • 175%-199%: $1,200
  • 200%-224%: $1,600
  • 225%-249%: $2,000
  • 250%+: $2,400

The conservation credit increases the fuel economy credit based on the following lifetime fuel savings:

  • 1,200-1,799 gal: $250
  • 1,800-2,399 gal: $500
  • 2,400-2,999 gal: $750
  • 3,000 gal+: $1,000

To qualify for the credits, the vehicles must meet at least Bin 5 standards if they are up to 6,000 lb GVWR, or Bin 8 standards if the vehicles are 6,001 lb-8,500 lb GVWR.

Heavy-duty hybrid vehicles are subject to the following incremental cost limitations:

  • <14,001 GVWR: $7,500
  • 14,001-26,000 GVWR: $15,000
  • 26,001+ GVWR: $30,000

This tax credit replaces the tax deduction previously available to purchasers under the Clean Fuel Vehicle Property guidance. This tax credit expires December 31, 2010.

The IRS issued guidance to automobile manufacturers in January 2006. Specifically, this notice provides procedures for a vehicle manufacturer to certify to the Internal Revenue Service both that the vehicle meets certain requirements for the credit and information to calculate the amount of the credit allowable with respect to that vehicle.

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Biodiesel and Ethanol (VEETC) Tax Credit

The American Jobs Creation Act of 2004 (Public Law 108-357) created tax incentives for biodiesel fuels and extended the tax credit for fuel ethanol. The biodiesel credit is available to blenders/retailers beginning in January 2005. It also established the Volumetric Ethanol Excise Tax Credit (VEETC), which provides ethanol blenders/retailers with $.51 per pure gallon of ethanol blended or $.0051 per percentage point of ethanol blended (i.e., E10 is eligible for $.051/gal; E85 is eligible for $.4335/gal). The incentive is available until December 31, 2011.

Section 1344 of the Energy Policy Act of 2005 extended the tax credit for biodiesel producers through 2008. The credits are $.51 per gallon of ethanol at 190 proof or greater, $1.00 per gallon of agri-biodiesel, and $.50 per gallon of waste-grease biodiesel. If the fuel is used in a mixture, the credit amounts to $.0051 per percentage point ethanol or $.01 per percentage point of agri-biodiesel used or $.0050 per percentage point of waste-grease biodiesel (i.e. E100 is eligible for $.51 per gallon) For more information, visit IRS Form 637 and IRS publication 510.

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Qualified Plug-In Electric Drive Motor Vehicle Tax Credit

A tax credit is available for the purchase of a new qualified plug-in electric drive motor vehicle that draws propulsion using a traction battery that has at least four kilowatt hours (kWh) of capacity, uses an external source of energy to recharge the battery, has a gross vehicle weight rating of up to 14,000 pounds, and meets specified emission standards. The minimum credit amount is $2,500, and the credit may be up to $7,500, based on each vehicle’s traction battery capacity and the gross vehicle weight rating. The credit will begin to be phased out for each manufacturer in the second quarter following the calendar quarter in which a minimum of 200,000 qualified plug-in electric drive vehicles have been sold by that manufacturer for use in the United States. This tax credit applies to vehicles acquired after December 31, 2009. For more information, see the Internal Revenue Service (IRS) Plug-In Electric Vehicle Credit website and IRS Form 8936, which is available via the IRS website.

A credit is also available for the purchase of a new qualified two- or three-wheeled plug-in electric drive vehicle that draws propulsion using a traction battery that has at least 2.5 kWh of capacity, uses an external source of energy to recharge the battery, has a gross vehicle weight rating of up to 14,000 pounds, is manufactured primarily for use on public roadways, and can drive at least 45 miles per hour. The credit is for 10% of the cost of the qualified vehicle, up to $2,500, and applies to vehicles acquired between January 1, 2012, and December 31, 2013.   (Reference Public Law 112-240 and 26 U.S. Code 30D)

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Helpful Websites & Contacts

The Oklahoma Recovery & Reinvestment Website provides descriptions, links, and funding levels for projects in the State of Oklahoma.
Recovery.Gov is a federal website including timelines, descriptions, and funding levels for projects sorted by state, category, or agency.
• Access the U.S. Department of Energy Funding Opportunities for the latest information on funding opportunities available to Clean Cities coalitions and stakeholders.
• To receive electronic updates of the Monthly Summary of Open Solicitations, which is produced by the Center for Economic and Environmental Partnership, Inc., e-mail your request to laurie.brown@ceepinc.org.

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