The purchasers of flex fuel vehicles receive a Christmas gift from the Louisiana First Circuit Court of Appeal upholding the La. Board of Tax Appeals judgment in Bolotte v. LDR (BTA 8007 5/14/2014), which held they qualify for the $3,000 refundable income tax credit under La. RS 47:6035.
The Louisiana Department of Revenue has lost round two in its fight against the refundable $3,000 income tax credit for the purchase of flex fuel vehicles (FFV). Judge Scott Gardner ruled for the taxpayers on December 22, 2014 at the 22nd JDC, affirming the decision granting the La. R.S. 47:6035 credit to FFVs in Bolotte v. LDR, 8007 (Bd. Tax App., May 14, 2014). While we wait for this lead case to complete its appeal process, anyone purchasing a FFV in 2010 has until December 31, 2014 to amend their 2010 tax return to claim the credit. 2011 purchasers have until December 31, 2013 to amend.
A taxpayer who purchased a new FFV between 2010 and July 1, 2013, may claim the La. alternative fuel vehicle income tax credit (10% of the purchase price up to $3,000) through an amended Louisiana income tax return. The right to claim a refund for income tax year 2010 will prescribe on December 31, 2014, 2011 in 2015, and so on.
When LDR denies the refund claim (or disallows the credit taken), the taxpayer should promptly file a petition for review with the Louisiana Board of Tax Appeals, as the right to do so prescribes in 60 days from the denial. The petition is very simple and should not have a filing fee. You can see the instructions for filing same at the Board’s website. Taxpayers may be represented at the BTA by a lawyer, a CPA or by themselves. Because the FFV tax credit issue is still working its way through appeal, the newly filed BTA appeals should simply sit and wait.
If a taxpayer failed to appeal the LDR appeal timely, s/he may still file a claim against the state with the Board of Tax Appeals, which has the same prescriptive period as claiming the refund itself. For example, a person making a 2012 claim for the FFV credit for a 2010 FFV purchase was more than likely denied in March 2013. If it wasn’t appealed within 60 days, the taxpayer cannot appeal the denial now but must instead file a claim against the state for the credit. The Board has provided instructions for this on it website as well. The biggest difference between this action and one appealing a refund denial is that a refund will be promptly paid by LDR but a claim against the state must be paid by way of appropriation by the legislature.
If you have any questions, do not hesitate to call us. While some taxpayers have the time and ability to handle such a matter on their own, we are presently representing a group of clients who prefer to have representation through the process.
On May 14, 2014, the Board of Tax Appeals granted the first flex fuel credit in that matter Bolotte v. LDR, BTA #8007. The decision essentially states that because LDR interpreted La. R.S. 47:6035 as including flex fuel vehicles and that law did not change until July 2013, which was to specifically remove the flex fuel vehicle from qualifying, the credit must be allowed until the July 2013 amendement. One of the 3 board members dissented on the grounds that he does not think the flex fuel vehicle ever qualified for the credit and his opinion generally includes a concern about the overall cost of the credit to the state.
It is certain that the state will appeal.
Should the matter be fully resolved in favor of the taxpayers, those individuals with pending claims will be entitled to their refund. For those persons that purchases a flex fuel vehicle from 2010 through July 2013, your right to amend your tax return to claim the credit is still available. LDR will deny it and you would have to appeal within 60 days of the denial in order to preserve your rights. If you have already claimed your credit and did not appeal the denial, you may file a claim against the state. Louisiana income tax year 2010 will close on December 31, 2014.
Lance J. Kinchen, J.D., L.L.M., C.P.A.
Corporate, Tax and Estate Planning
Nicole F. Gould, M.B.A., J.D.
State and Local Tax Controversy
The Louisiana refundable income tax credit for 10%, up to $3,000, of the acquisition price of a new alternative fuel vehicles received recent attention. The Louisiana Department of Revenue issued a “Frequently Asked Questions” Revenue Information Bulletin on May 3, 2012. Anyone in the business of selling new alternative fuel vehicles, converting vehicular gasoline or diesel engines to alternative fuel systems , or any person or business procuring new alternative fuel vehicles should take a moment to review the RIB 12-025 together with the Department of Energy’s list of vehicles assumed to qualify. While many nuances to the refundable credit exist, it is important to keep in mind that the lessor of 10% of the cost price of the new vehicle or $3,000 can be used to offset the new vehicle acquisition cost. As much as 50% of the cost of clean burning fuel equipment may qualify for the credit in fuel system conversions.
Please refer to the U.S. Department of Energy to find a new vehicle presumed to qualify for the credit at: http://www.afdc.energy.gov/afdc/vehicles/index.html
Please refer to the Louisiana Department of Revenue for more information on how to take and qualify for the credit at:
Revenue Information Bulletin No. 12-025 – Frequently Asked Questions Relating to the Emergency Rule on Alternative Fuel Credit
Revenue Information Bulletin No. 12-026 – Amended Frequently Asked Questions Relating to the Emergency Rule on Alternative Fuel Credit.
LAC:61.I.1912, found at http://www.revenue.louisiana.gov/forms/lawspolicies/Emergency%20Rule%20-%20Alternative%20Fuel%20Credit.pdf