BSW Tax Blog

Federal and Louisiana Taxes

Tag Archives: Alternative Fuel Vehicle

Taxpayers take Round Two!

boxing glovesThe 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.

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 However, on June 14, 2012, Governor Jindal rescinded   the April 30, 2012 emergency rule, stating in a press release that the   emergency rule exceeded the scope of the enacted tax credit and the financial  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

Alternative Fuel Vehicle Credit

Lance J. Kinchen, J.D., L.L.M., C.P.A.
Corporate, Tax and Estate Planning

Partner—Baton Rouge
Phone: 225.381.8053 lance.kinchen@bswllp.com

Nicole F. Gould, M.B.A., J.D.
State and Local Tax Controversy

Of Counsel—Baton Rouge
Phone:
225.381.3165 nicole.gould@bswllp.com

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