On Friday, December 18th, President Obama signed the Consolidated Appropriations Act of 2016 (H.R. 2029). Division Q, the “Protecting Americans from Tax Hikes Act” (PATH Act), retroactively extending many tax credits. PATH Act provisions with implications for clean transportation include:
- Alternative Fuel Infrastructure Tax Credit. Section 182 extends the tax credit for alternative fuel infrastructure through December 31, 2016. Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, and biodiesel are eligible for a tax credit of 30%, up to $30,000. Residential fueling equipment may receive a tax credit up to $1,000.
- Alternative Fuel Excise Tax Credit. Section 192 extends the $0.50 per gallon tax credit for alternative fuels, including liquefied hydrogen, through December 31, 2016.
- Alternative Fuel Mixture Excise Tax Credit. Section 192 also extends the $0.50 per gallon tax credit for alternative fuel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene through December 31, 2016. Alternative fuel blenders must be registered with the Internal Revenue Service (IRS).
- Qualified Two-wheeled Plug-In Electric Drive Motor Vehicle Tax Credit. Section 183 extends the two-wheeled plug-in electric drive motor vehicle tax credit through December 31, 2017. Qualified vehicles are eligible of a tax credit for 10% of the cost of the vehicle, up to $2,500.
- Fuel Cell Motor Vehicle Tax Credit. Section 193 extends the $4,000 tax credit for the purchase of qualified light-duty fuel cell vehicles through December 31, 2016.
- Biodiesel Income Tax Credit. Section 185 extends the biodiesel income tax credit through December 31, 2016. A taxpayer that delivers unblended biodiesel (B100) into the tank of a vehicle may be eligible for a $1.00 per gallon of biodiesel, agri-biodiesel, or renewable diesel tax credit.
- Biodiesel Mixture Excise Tax Credit. Section 185 also extends the $0.50 per gallon tax credit for biodiesel, agri-biodiesel, or renewable diesel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene through December 31, 2016. Alternative fuel blenders must be registered with the IRS.
- Second Generation Biofuel Production Property Depreciation Allowance. Section 189 extends the 50% special depreciation allowance for second generation biofuel production plants through January 1, 2017.
- Second Generation Producer Tax Credit. Section 184 extends the tax credit for second generation biofuel producers throughDecember 31, 2016. Second generation biofuel producers registered with the IRS may be eligible for a $1.01 per gallon of biodiesel tax credit.
The changes outlined above are effective immediately. To view the full text of the PATH Act, visit https://www.gpo.gov/fdsys/pkg/BILLS-114hr2029enr/pdf/BILLS-114hr2029enr.pdf. See the Alternative Fuels Data Center Federal Laws and Incentives page for descriptions of each incentive.