Question of the Month: What provisions in the enacted “fiscal cliff” legislation relate to alternative fuels and advanced vehicles?
Answer: On January 2, 2013, President Obama signed Public Law 112-240, the American Taxpayer Relief Act of 2012. In addition to averting tax rate increases and postponing government spending reductions, this legislation extends several tax credits and other incentive programs related to Clean Cities portfolio items. Updated information on these incentives is available on the Alternative Fuels Data Center (AFDC) Federal Laws and Incentives page. The changes are also summarized below.
The American Taxpayer Relief Act retroactively extends several tax credits that had expired on December 31, 2011. The following incentives are now effective through December 31, 2013:
- Alternative Fuel Excise Tax Credit: (Public Law 112-240, Section 412)
- Alternative Fuel Infrastructure Tax Credit: (Public Law 112-240, Section 402)
- Alternative Fuel Mixture Excise Tax Credit: (Public Law 112-240, Section 412)
- Biodiesel Income Tax Credit: (Public Law 112-240, Section 405)
- Biodiesel Mixture Excise Tax Credit: (Public Law 112-240, Section 405)
The legislation expands the tax definition of second generation biofuel (previously referred to as cellulosic biofuel) to include biofuel from cultivated algae, cyanobacteria, or lemna, and extends two incentives related to these fuels through December 31, 2013:
- Second Generation Biofuel Plant Depreciation Deduction Allowance: (Public Law 112-240, Section 410)
- Second Generation Biofuel Producer Tax Credit: (Public Law 112-240, Section 404)
Section 403 of the Act expands the Qualified Plug-In Electric Drive Motor Vehicle Tax Credit to include a credit for eligible two- and three-wheeled plug-in electric drive vehicles, valid through December 31, 2013.
In addition, Section 701 extends discretionary funding for the following U.S. Department of Agriculture programs through September 2013:
- Advanced Biofuel Production Grants and Loan Guarantees
- Advanced Biofuel Production Payments:
- Biodiesel Education Grants:
- Biomass Research and Development Initiative:
- Ethanol Infrastructure Grants and Loan Guarantees:
To view the full text of the American Taxpayer Relief Act, select the Enrolled Bill version from this website.
The changes outlined above became effective immediately. It may take time, however, for the relevant agencies to update documentation to reflect these extensions and changes. For further information, please refer to the following websites:
- U.S. Internal Revenue Service, Forms & Publications
- U.S. Department of Agriculture, Rural Development Energy Programs
Clean Cities Technical Response Service Team
800-254-6735
