Congress Extends Alternative Fuel and Infrastructure Tax Credits

WASHINGTON – Congress passed the American Taxpayer Relief Act on Jan. 1, 2013, which provided one-year extensions for several tax credits affecting alternative fuels, including those for compressed natural gas (CNG), liquefied natural gas (LNG), and propane.

Specifically, this includes the 50-cent per GGE alternative-fuel tax credit for CNG, LNG, and propane, and the $30,000 infrastructure tax credit. The tax credits are extended until Dec. 31, 2013 and are retroactive for all of 2012.

The amended bill, now called the "American Taxpayer Relief Act of 2012," contains several extensions outlined in Title IV (Energy Tax Extenders) of the bill. These include:

• Credit for alternative-fuel vehicle refueling property extended to Dec. 31, 2013 and retroactive to infrastructure installed after Dec. 31, 2011.
• Alternative fuels excise tax credits extended to Dec. 31, 2013 and are retroactive for all of 2012.
• Credit for two- or three-wheeled plug-in electric vehicles. In the case of a qualified two- or three-wheeled plug-in electric vehicle, up to 10 percent of the cost of the qualified two- or three-wheeled plug-in electric vehicle, or $2,500 may be allowed as a credit. Qualifying two- or three-wheel vehicles need a 2.5 kWh pack (down from 4 kWh), are capable of achieving a speed of 45 mph (72 km/h)or greater, and must have been acquired after Dec. 31, 2011 and before Jan. 1, 2014.
• Extension and modification of cellulosic biofuel producer credit. The extension now carries through to qualified production beginning before Jan. 1, 2014. Algae is treated as a qualified feedstock. Additionally, the section strikes the term cellulosic biofuel in favor of "second generation biofuel.”
• Incentives for biodiesel and renewable diesel extended to Dec. 31, 2013.
• Special allowance for cellulosic biofuel plant property extended to Jan. 1, 2014. In addition, algae is treated as a qualified feedstock for such.

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Updated Jan. 2, 2013. at 1:58 p.m. to include tax credits for propane.