|In May 2012, a tax alert was issued discussing state and federal income tax credits for alternative fuel vehicles. On April 30, 2012, the Louisiana Department of Revenue issued an emergency rule providing for a presumption that the vehicles listed with the United States Department of Energy as alternative fuel vehicles qualify for the state alternative fuel income tax credit. However, on June 14, 2012, Governor Jindal rescinded the April 30, 2012 emergency rule, stating in a press release that the emergency rule exceeded the scope of the enacted tax credit and the financial impact in reality would dwarf that originally projected.On June 19, 2012, Jane Smith, Acting Secretary for the Louisiana Department of Revenue, issued a press release stating quite simply that any credit postmarked on or before June 14, 2012 will be granted and any refund already paid will be honored. The question remains, then, ‘what alternative fuel vehicles qualify for the credit?’
La. R.S. 47:6035 provides that any person or corporation purchasing “qualified clean-burning motor vehicle fuel property” shall be allowed a refundable income tax credit for:
i.) new vehicles purchased at retail and registered in Louisiana that are originally equipped with “qualified clean-burning motor vehicle fuel property,”
ii.) existing Louisiana-registered vehicles converted to “qualified clean-burning motor vehicle fuel property” by a qualified technician, and
iii.) property directly related to the delivery of alternative fuel into the fuel tank of the motor vehicles propelled by alternative fuel.
“Qualified clean-burning motor vehicle fuel property” is defined as equipment necessary for a motor vehicle to operate on an alternative fuel and shall not include equipment necessary for operation of a motor vehicle on gasoline or diesel. The credit is equal to 50% of the cost of the “qualified clean-burning motor vehicle fuel property” and its installation, or, in the case of a new vehicle, 10% of the vehicle purchase price up to $3,000.
It is easy to see how the income tax credit exists, however, taxpayers must prove the new vehicle purchased is propelled by alternative fuel. Importantly, the statute does not exclude new vehicles that are propelled on both alternative fuel and gasoline or diesel.
As you can clearly see, the statute granting the tax credit remains the same even though the Louisiana Department of Revenue has varied its position on what qualifies for the alternative fuel tax credit. As such, if you were denied your Louisiana income tax credit for your alternative fuel expenses, you must file your appeal with the Louisiana Board of Tax Appeals within 60 days to preserve your right to the refund. There is no required form and presenting appeals at the BTA can be very easy. I encourage all affected by the LDR denial to try for your day in court. If your refund is worth significant value, you might find it worth while to retain representation for your appeal. Good luck!