BSW Tax Blog

Federal and Louisiana Taxes

Louisiana Alternative Fuel Vehicle Income Tax Credit UPDATED

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 However, on June 14, 2012, Governor Jindal rescinded   the April 30, 2012 emergency rule, stating in a press release that the   emergency rule exceeded the scope of the enacted tax credit and the financial  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.

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One response to “Louisiana Alternative Fuel Vehicle Income Tax Credit UPDATED

  1. Nicole Gould May 28, 2013 at 2:06 PM

    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!

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