IRS Releases Guidance on ALT Fuel Refueling Property Credit
The Transport Project Secures RNG Fueling Parity with Electric in Section 30C
Washington, DC – The Transport Project (TTP) today released a fact sheet with updated information on rules and guidance related to claiming the Section 30C tax credit for alternative fuel refueling property. On September 19th, the U.S. Department of Treasury Internal Revenue Service (IRS) issued a notice proposing regulations implementing changes adopted as part of the Inflation Reduction Act of 2022. Comments on the proposed notice are due November 18th.
Language in the Inflation Reduction Act of 2022 significantly improve the Section 30C benefit for business investments in natural gas and hydrogen fueling by increasing the tax credit value from a maximum of 30 percent or $30,000 per qualifying fueling station to $100,000 per single item of qualifying alternative refueling property.
“Hats off to TTP staff and member company advocates who worked to ensure that proposed IRS guidance reflects Congressional intent,” said TTP President Dan Gage. “The reconstructed Alt Fuel Refueling Infrastructure Tax Credit supports the continued national buildout of gaseous-fueled infrastructure for renewable natural gas (RNG) and hydrogen trucks and buses on par with that for battery-electric commercial vehicles.”
Proposed regulatory changes recently released by the IRS:
- Clarify that the tax credit applies to functionally interdependent components of refueling property and equipment that is integral to refueling, greatly increasing the return on investment for fueling station operators including large fueling depots that refuel over-the-road trucks powered by natural gas, hydrogen and other fuels;
- Retain the $1,000 tax credit for residential refueling equipment so long as it is installed at a primary residence and meets the census tract requirements;
- Expand the tax credit for large refueling facilities requiring millions of dollars of investment previously limited to $30,000 per location per year to potentially several hundred thousand dollars for each new refueling station; and
- Make it easier for tax exempt entities to claim the tax credit if they chose to “elect” to receive the tax credit as a payment from the IRS; taxable entities also now have the option of transferring a portion or all of the tax credit to another entity if they so choose. The IRS in separate notices has established guidance on elective payments and transfer transactions. The provisions in general make it easier for taxpayers to more easily realize the benefits of the tax credit.
Other changes related to the tax credit include limiting its availability to certain low-income or non- urban census tracts, a requirement that construction of fueling stations include payment of prevailing wages, and an apprenticeship requirement. Taxpayers not demonstrating compliance with the wage and apprenticeship requirements are limited to a tax credit of 6 percent or $100,000, whichever is less. The latter requirement wage and apprenticeship provisions do not apply to residential fueling.
Access The Transport Project’s Section 30C Alternative Fuel Refueling Infrastructure Tax Credit Fact Sheet HERE.
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The Transport Project is a national coalition of roughly 200 fleets, vehicle and engine manufacturers and dealers, servicers and suppliers, and fuel producers and providers dedicated to the decarbonization of North America’s transportation sector. Through the increased use of gaseous motor fuels including renewable natural gas and hydrogen, the United States and Canada can help achieve ambitious climate goals and greatly improve air quality safely, reliably, and effectively without delay and without compromising existing commercial business operations. Find out more at: transportproject.org.
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