NGVAmerica began its legislative work in 2013 with the successful inclusion of federal NGV tax incentives as part of the American Taxpayer Relief Act of 2012 (HR 8; PL 112–240). Included is a 50 cent credit per gallon or gasoline gallon equivalent for the sale of natural gas as a motor fuel and a credit for 30 percent of the cost of installing new natural gas refueling equipment for up to $30,000. The incentives are intended to expand the availability of natural gas refueling stations, increase the use of natural gas as a motor fuel, and reduce demand for petroleum motor fuels. For more information on these tax credits, visit our Federal NGV Tax Incentives page or see the fact sheets below.
NGVAmerica will continue its legislative work in 2013 by pursuing the equitable taxation of liquefied natural gas (LNG). The federal highway excise tax on both diesel and LNG is set at 24.3 cents per gallon (IRC 4041). However, LNG has less energy per gallon than diesel fuel. In fact, it takes about 1.7 gallons of LNG to equal the same energy content as one gallon of diesel. This results in LNG being taxed at 170 percent the rate of diesel on an energy equivalent basis. This inequity raises the cost of LNG versus diesel fuel and thereby reduces its natural economic advantages and slows its widespread adoption among heavy duty truckers. NGVAmerica is working with congress to change the way LNG is taxed—from a volume (gallon) to an energy content (diesel gallon equivalent) basis. For more information on this issue, visit the fact sheet below.
Two other legislative goals are eliminating or amending the Federal Highway Excise Tax on Heavy Duty Trucks (IRC 4051, 4053) and reinstating the Income Tax Credits for Acquiring Natural Gas Vehicles (IRC30B). IRC 4051 currently imposes a 12 percent excise tax on heavy duty trucks, trailers, and tractors. The tax is a penalty because the 12 percent rate is assessed not only on the base cost of the truck but also on the incremental cost, unnecessarily adding to the already higher cost of these vehicles. The result is added sticker shock for buyers and a longer payback period. This tax makes it harder for many businesses that may be considering natural gas trucks to justify that initial purchase. Congress should do away with this tax or, at a minimum, amend section 4051 so that the incremental cost of natural gas trucks and other advanced technology trucks is exempted from the tax. Reinstating the Income Tax Credits for Acquiring Natural Gas Vehicles (IRC 30B) would help further accelerate the adoption of NGVs. The Energy Policy Act (EPAct) of 2005 (PL 109–58) provided for an income tax credit for the purchase of a new, dedicated natural gas vehicle of up to 50 percent of the incremental cost of the vehicle, plus an additional 30 percent if the vehicle met certain tighter emission standards. Congress should reinstate the incentives for natural gas vehicles and extend them for a period of five years. The credits also should be expanded to provide an incentive for bi-fuel vehicles that operate primarily on natural gas and rely on gasoline or diesel as a backup. To learn more about these legislative goals and others, please reference the document below.
Information on Current Legislation
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