• 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
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)
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)
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)
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)
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)
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)
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)
