The American Taxpayer Relief Act of 2012 (“Act”), which was signed by the President in early January, retroactively renews and extends the Federal Alternative Fuels Excise Tax Credit (“Alternative Fuels Credit”), as specified under Internal Revenue Code Section 6426(d). The Alternative Fuels Credit, which previously expired December 31, 2011, has been extended through December 31, 2013.
The Alternative Fuels Credit applies to alternative fuels used by a taxpayer in, or sold by a taxpayer for use in, aviation, a motor vehicle, or a motorboat. The amount of the credit permitted is $0.50 per gallon of liquid alternative fuel and, in the case of non-liquid alternative fuel, $0.50 per gasoline gallon equivalent.
The term “alternative fuel” includes:
- Liquefied petroleum gas, commonly known as propane
- P Series fuels
- Compressed or liquefied natural gas
- Liquefied hydrogen
- Any liquid fuel derived from coal through the Fischer-Tropsch process according to certain carbon capture requirements
- Compressed or liquefied gas derived from biomass
- Liquid fuel derived from biomass
The Department of Treasury has not yet issued any special rules or subsequent guidance for submitting claims for the Alternative Fuels Credit.
The Fuels and Excise Tax practice at Ryan specializes in detailed review techniques that minimize client site disruptions, while properly identifying available alternative fuels credits and other motor fuels tax credits. Ryan’s process provides the detailed documentation and licensing requirements, including responses to information document requests from the Internal Revenue Service, required to achieve sustainable alternative fuels credits. In addition, Ryan provides tailored recommendations to maximize future credits, as well as audit defense for alternative fuels credit claims.