SB 256

This bill would provide an income tax credit for qualified clean-burning motor fuel property, including motor vehicles propelled by compressed natural gas, liquefied natural gas, or liquefied petroleum gas, for tax years beginning on January 1, 2019

To provide a credit against the state income tax for the installation of certain qualified clean-burning motor fuel property.

Section 1

(a) For the purposes of this act, the following words have the following meanings: (1) MOTOR VEHICLE. A motor vehicle as defined in Section 32-1-1.1 of the Code of Alabama 1975, licensed to operate lawfully and principally on streets and highways of this state. (2) QUALIFIED CLEAN-BURNING MOTOR VEHICLE FUEL PROPERTY. Any of the following: a. Equipment installed to modify a motor vehicle which is propelled by gasoline or diesel fuel so that the vehicle may be propelled by compressed natural gas, liquefied natural gas, or liquefied petroleum gas. The equipment covered by this paragraph shall be new and may not have been previously used to modify or retrofit any vehicle propelled by gasoline or diesel fuel. b. A motor vehicle originally equipped so that the vehicle may be propelled by compressed natural gas, liquefied natural gas, or liquefied petroleum gas, but only to the extent of the portion of the cost of the motor vehicle which is attributable to the storage of the fuel, the delivery to the engine of the motor vehicle of the fuel, and the exhaust of gases from combustion of the fuel. c. Property, not including a building and its structural components, which is either of the following: 1. Directly related to the delivery of compressed natural gas, liquefied natural gas, or liquefied petroleum gas for commercial purposes or for a fee or charge into the fuel tank of a motor vehicle propelled by the fuel including compression equipment and storage tanks for the fuel at the point where the fuel is delivered, but only if the property is not used to deliver the fuel into any other type of storage tank or receptacle and the fuel is not used for any purpose other than to propel a motor vehicle. 2. A metered-for-fee public access recharging system for motor vehicles propelled in whole or in part by electricity. The property covered by this subparagraph shall be new, and may not have been previously installed or used to refuel vehicles powered by compressed natural gas, liquefied natural gas, or liquefied petroleum gas or electricity. d. Property which is directly related to the compression and delivery of natural gas from a private home or residence, for noncommercial purposes, into the fuel tank of a motor vehicle propelled by compressed natural gas. The property covered by this subparagraph shall be new and may not have been previously installed or used to refuel vehicles powered by natural gas.

Section 2

(a) For tax years beginning on or after January 1, 2019, there shall be allowed a one-time credit against the income tax imposed by Chapter 18, of Title 40, Code of Alabama 1975, as follows: (1) For qualified clean-burning motor vehicle fuel property defined in paragraphs a., b., or c. of subdivision (1) of Section 1, 50 percent of the cost of the qualified clean-burning motor vehicle fuel property. (2) For qualified clean-burning motor vehicle fuel property defined in paragraph d. of subdivision (1) of Section 1, a credit of the lesser of 50 percent of the cost of the qualified clean-burning motor vehicle fuel property or two thousand five hundred dollars ($2,500). (b) In cases in which no credit has been claimed pursuant to subsection (a) by any prior owner and the motor vehicle is purchased by a taxpayer with qualified clean-burning motor vehicle fuel property installed by another person or the manufacturer of the motor vehicle, and the taxpayer is unable or elects not to determine the exact cost which is attributable to the property, the taxpayer may claim a credit in an amount not exceeding the lesser of 10 percent of the cost of the motor vehicle or one thousand five hundred dollars ($1,500). (c) If the tax credit allowed in a taxable year pursuant to this section exceeds the amount of income taxes due or if there are no state income taxes due on the income of the taxpayer, the amount of the credit not used as an offset against the income taxes for a taxable year may be carried forward as a credit against subsequent income tax liability for a period not to exceed five years. (d) A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one half of the tax credit that would have been allowed for a joint return.

Section 3

The Department of Revenue may adopt rules to carry out the purpose of this act, including rules to establish and enforce civil penalties for violations thereof.

Section 4

This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.