WASHINGTON - The Middle Class Tax Relief Act of 2010 (HR 4853), passed by Congress and signed into law by President Obama on Dec. 17, includes extensions of two key incentives for natural gas vehicles. In addition, the law extends the ethanol tax credit through 2011, and retroactively extends the biodiesel tax incentive and the renewable diesel incentive through 2011.
NGVAmerica, a national group promoting vehicles powered by natural gas or biomethane, praised the law's natural gas vehicle (NGV) provisions. 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 percent of the cost or $30,000, whichever is less. This credit also includes a $1,000 tax credit for a home refueling unit.
"At a time of very tight budgets, the inclusion of these tax incentives demonstrates Congress' commitment to a growing natural gas vehicle industry," said Richard Kolodziej, president of NGVAmerica. "Since natural gas vehicles reduce the use of foreign oil, reduce greenhouse gases and reduce air pollution, this legislation will help achieve all three of these national goals. And, importantly, this legislation will provide a significant boost to jobs throughout the natural gas vehicle field, not only in the production of natural gas but in the manufacture of the components that go into these vehicles, the manufacture of these vehicles, and the jobs that are created by building new natural gas stations."
The natural gas vehicle tax credits, which expire at the end of the year, were not included in the legislation, but Kolodziej said the industry will work to reinstate them in the new Congress. 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. With the continuation of these incentives, NGVAmerica expects that rate to continue to grow.
Tom Buis, CEO of ethanol industry group Growth Energy, also praised the legislation. In a letter he presented to Obama, Buis wrote: "Every year, our addiction to foreign oil drains $1,000 for every man, woman and child out of our economy. That is money we should invest in Des Moines, not Abu Dhabi -- Columbus, and not Caracas. ...by signing into law a one-year extension of the Volumetric Ethanol Excise Tax Credit, your leadership has set the table for comprehensive, long-term energy policy, including reform of the American transportation fuels market, as proposed by Growth Energy's Fueling Freedom proposal. Our plan to reform the market would encourage the installation of blender pumps and make every auto sold in the U.S. a Flex Fuel Vehicle, ultimately giving American consumers the power to choose their fuel at the pump, instead of having that choice made for them."