The much publicized tax and unemployment-benefits measure passed by Congress last week also contains tax breaks for use of automotive alternative fuels, but not for the vehicles themselves.
The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 renews tax credits for natural gas, biodiesel and ethanol through the end of 2011, and makes them applicable for all of this year.
Liquified petroleum gas for cars and trucks was not mentioned in either the Senate or House versions of the bill, but propane proponents are working to get breaks for this widely used fuel included in other legislation. Hybrid-drive vehicles were not covered, either.
Natural Gas Vehicles for America, a trade association, says the legislation extends through 2011:
* the 50-cent per gallon tax credit for compressed and liquefied natural gas when used as a vehicle fuel. This tax credit, which expired at the end of 2009, is retroactive for 2010.
* the investment tax credit for alternative vehicle refueling property, including natural gas stations. This covers 30% of the cost or $30,000, whichever is less. This credit also includes a $1,000 tax credit for a home refueling unit.
Tax credits for buying natural-gas vehicles themselves, which expire at the end of this year, were not included in the legislation. But NGV America says the industry will work to reinstate them in the new Congress. For a couple of more weeks, those credits are worth $2,500 to $32,000 per vehicle.
The legislation also revives credits for biodiesel and renewable diesel-fuel mixtures that expired at the end of 2009. These include $1 per gallon production tax credit for biodiesel, as well as the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2011 the $1 per gallon production tax credit for diesel fuel created from biomass.
For ethanol, the bill extends through 2011 the per-gallon tax credits and outlay payments. It extends through 2011 the existing 14.27 cents per liter (54 cents per gallon) tariff on imported ethanol and the related 5.99 cents per liter (22.67 cents per gallon) tariff on ethyl tertiary-butyl ether (ETBE).
Tax credits for alternative fuels now extend to the end of 2011, and are retroactive for all of 2010. Users will be allowed to file a one-time application for tax refunds during 2011; the law calls for the Treasury Department to set up procedures soon and pay the rebates within 60 days of their filing. The rebates also apply to natural gas.
As before, the tax credits encourage use of alternative fuels to reduce the nation's dependence on imported oil, reduce air pollution and cut emissions of greenhouse gases.
Since federal incentives were introduced in 2006, vehicular natural gas usage has increased 25 percent each year, displacing more than 320 million gallons of gasoline, NGV America said. With the continuation of these incentives, the group expects that rate to continue to grow.
The legislation further includes scores of tax breaks for energy efficient home appliances as well as education and other items not related to energy matters.
