Congress Passes Alternative Fuel Tax Credit Law
American Gas & Technology LP is very pleased by the passage by the U.S. Congress of an alternative fuel tax credit extension bill. The bill was signed into law by the President. This tax credit extension will continue to motivate fleet operators to use natural gas as its transportation fuel of choice. The credit is retroactive to 2015 and extends through 2016. It applies to liquefied natural gas (LNG) and compressed natural gas (CNG). For a more comprehensive treatment of the fuel excise tax credit extension.
ALTERNATIVE FUEL EXCISE TAX CREDIT
The credit is retroactive to 2015 and extends through 2016 and applies to compressed natural gas (CNG) and liquefied natural gas (LNG).
NOTE: This incentive was retroactively extended multiple times, most recently through December 31,2016. A tax incentive is available for alternative fuel that is sold for use or used as a fuel to operate a motorvehicle.
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 hydrogen, liquefied petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, andcompressed 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 withthe 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 paymentfrom the IRS.
The tax credit is not allowed if an incentive for the same alternative fuel is also determinedunder 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, 2016. For more information about claiming the credit, see IRS Publication 510, IRS Forms 637, 720, 4136, and 8849, and IRS Notice 2015-56 (August 2015),which are available on the IRS Forms and Publications website.
(Reference Public Law 114-113 and 26U.S. Code 6426)