Alternative Fuels Data Center: Alternative Fuel Excise Tax Credit

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class="icon-eere-print"></i><br /> Print </a> </div> <div class="span12"> <a href="#cancel" id="print_preview_cancel"> <i class="icon-eere-close"></i><br /> Close </a> </div> </div> </div> <div id="print_header" class="row-fluid visible-print"> <h3>U.S. Department of Energy - Energy Efficiency and Renewable Energy</h3> <h4>Alternative Fuels Data Center</h4> </div> <div class="container-fluid hidden-print"> <div id="utility_line" class="row-fluid"> <div id="breadcrumb" class="span18"> <div><a href="http://www.eere.energy.gov/">EERE</a> » <a href="/">AFDC</a> » <a href="/laws">Laws & <span class="primary-nav-break">Incentives</span></a> » <span>Federal</span></div> </div> <div class="span6 last"> <ul id="utilities"> <li id="print" class="hidden-phone hidden-tablet"><a href="#printable"><i class="icon-eere-utility-print"></i>Printable Version</a></li> </ul> </div> </div> </div> </header> <div class="container-fluid"> <div class="row-fluid"> <div class="span4 hidden-print"> <div 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Excise Tax Credit</h1> <h2 class="li-not-current">Expired: 01/01/2025</h2> <div class="row-fluid"> <div class="span16"> <p>NOTE: This incentive was originally set to expire on December 31, 2021, but has been extended through December 31, 2024, by Public Law 117-169.</p> A tax incentive is available for alternative fuel that is sold for use or used as a fuel to operate a motor vehicle. A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: natural gas, propane, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. For propane and natural gas sold after December 31, 2015, the tax credit is based on the gasoline gallon equivalent (GGE) or diesel gallon equivalent (DGE). For taxation purposes, one GGE is equal to 5.75 pounds (lbs.) of propane and 5.66 lbs. of compressed natural gas. One DGE is equal to 6.06 lbs. of liquefied natural gas. </p> <p> For an entity to be eligible to claim the credit they must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive. Eligible entities must be registered with the Internal Revenue Service (IRS). The incentive must first be taken as a credit against the entity鈥檚 alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits. </p> <p> <p>For more information about claiming the credit, see IRS Form 4136, which is available on the <a href="https://apps.irs.gov/app/picklist/list/formsPublications.html">IRS Forms and Publications</a> website.</p> <p>(Reference <a href='http://www.gpo.gov/fdsys/'>26 U.S. Code 6426</a> and <a href='https://www.congress.gov/public-laws/117th-congress'>Public Law 117-169</a>)</p> <div style='margin-left:16px;'> <p> <i><strong>Point of Contact</strong></i> <br/> Excise Tax Branch <br/> U.S. Internal Revenue Service Office of Chief Counsel <br/> Phone: (202) 317-6855 <br/> <a href="http://www.irs.gov/">http://www.irs.gov/</a> <br/> <br/> </p> </div> </div> <div class="span8"> <div class="callout callout-law-details"> <p>Jurisdiction: <strong>Federal</strong></p> <p>Type: <strong>Incentives</strong></p> <p>Agency: <strong>U.S. Internal Revenue Service</strong></p> <p>Enacted: <strong>Aug 10, 2005</strong></p> <p>Amended: <strong>Aug 16, 2022</strong></p> <p>Technologies: <strong>Hydrogen Fuel Cells, Natural Gas, Other, Propane (LPG)</strong></p> <p>See all <a href="/laws/fed_summary">Federal Laws and Incentives</a>.</p> </div> </div> </div> <div class="li-about-data"> <div class="floatleft"> <a href="/laws/data_methodology.html" class="btn btn-blue">About the Data</a> </div> <div class="floatleft li-data-link"> <a href="/data_download/">Download Data</a> </div> <div class="floatleft li-data-link"> <a href="/data_download/laws_and_incentives_format">Data Fields</a> </div> <div class="floatleft li-data-link"> <a href="https://developer.nrel.gov/docs/transportation/transportation-incentives-laws-v1/">Developer API</a> </div> </div>  </div> </div> <footer> <div id="footer_nav" class="row-fluid hidden-print"> <div class="span4"> <div class="footer-nav-list"> <h5><a href="/fuels/">Fuels & Vehicles</a></h5> 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Alternative Fuels Data Center: Alternative Fuel Excise Tax Credit