SB256 Alabama 2018 Session

Summary

Primary Sponsor

Cam Ward

Republican

Session

Regular Session 2018

Title

Income tax, credit for certain qualified clean-burning motor fuel property including motor vehicles propelled by compressed natural gas, liquified natural gas, or liquified petroleum gas, limitation, Revenue Dept. authorized to make rules

Summary

SB 256 creates a one-time Alabama income tax credit to help pay for qualified clean-burning motor fuel equipment and related property for vehicles powered by CNG, LNG, LPG, or electricity, starting in 2019.

What This Bill Does

It allows a credit against state income tax equal to 50% of the cost of most qualified clean-burning motor fuel property. For home or private fueling equipment related to CNG, LNG, or LPG, the credit is the lesser of 50% of cost or $2,500. If the cost can’t be clearly allocated or the vehicle cost is uncertain, a fallback credit of up to 10% of the vehicle cost or $1,500 may be claimed. Unused credits can be carried forward for up to five years. Spouses filing separately may claim only half of the credit that would be allowed for a joint return; the Department of Revenue can issue rules and penalties related to the program, and the credit takes effect after the act becomes law.

Who It Affects

• Taxpayers who install or purchase qualified clean-burning motor fuel property (including vehicle conversion equipment, vehicles originally equipped for CNG/LNG/LPG, home or private fueling equipment, and public charging stations) and file Alabama income taxes
• Spouses filing separately, who would be eligible to claim only half of the credit that would be available if filing jointly

Key Provisions

• Defines qualified clean-burning motor vehicle fuel property, including conversion equipment, original equipment for CNG/LNG/LPG vehicles, fueling/delivery infrastructure, and metered public electric vehicle charging systems, plus private home compression/delivery equipment for noncommercial CNG fueling
• Provides a one-time credit starting in tax year 2019: 50% of the cost for most qualified property; for category d property (home/private fueling) the credit is the lesser of 50% of cost or $2,500
• If the cost cannot be allocated or the vehicle cost is uncertain, a fallback credit of up to 10% of the vehicle cost or $1,500 applies
• Any unused credit can be carried forward for up to five years
• Married couples filing separately may claim only half of the credit available for a joint return
• Department of Revenue may adopt rules and establish penalties related to the credit
• Effective immediately after the act is enacted and approved

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation