Federal Incentives

The U.S. Department of Energy’s Alternative Fuels & Advanced Vehicles Data Center maintains an extensive and up-to-date database of federal laws and incentives related to propane autogas. Be sure to check the site regularly as laws change over time. A summary of some of the specific incentives are below:

1. Alternative Fuel Infrastructure Tax Credit

The Alternative Fuel Infrastructure Tax Credit is available for the cost of alternative fueling equipment placed into service after December 31, 2005. Qualified alternative fuels, including propane autogas, receive credit for up to 30 percent of the cost, not to exceed $30,000. Equipment put in service in 2009 and 2010 may receive a credit in the amount of 50 percent of eligible costs, not to exceed $50,000. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit toward each location. Consumers who purchase qualified residential fueling equipment may receive a tax credit of up to $1,000. Under current law, the credit has been extended to December 31, 2013.

2. Alternative Fuel Excise Tax Credit

The Alternative Fuel Excise Tax Credit is available for alternative fuel 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 many alternative fuels, including liquefied petroleum gas (propane autogas). You must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Under current law, the credit has been extended to December 31, 2013.

3. Alternative Fuel Tax Exemption

Alternative fuels used in some nontaxable circumstances are exempt from federal fuel taxes, such as exclusive use by a nonprofit, in a school bus, or on a farm for farming purposes.

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