Alternative Fuel Vehicle (AFV) and Fueling Infrastructure Tax Credit for Businesses

Business owners and others may be eligible for a tax credit of 50% of eligible costs for qualified alternative fuel infrastructure projects through the Business Energy Tax Credit. Fueling infrastructure for fuels such as propane and natural gas may qualify for a tax credit of 35% of eligible costs. A tax credit of 35% of eligible costs is also available for other qualified AFV projects. The credit is filed over five years. Unused credits from a given year can be carried forward up to eight years. For projects with eligible costs of $20,000 or less, the tax credit may be taken in one year.

An eligible applicant (a project owner) must meet the following requirements:

• Be a trade, business, or rental property owner with a business site in Oregon or be an Oregon non-profit organization, tribe, or public entity that partners with an Oregon business or resident;
• Own or be the contract buyer of the project; and
• Use the equipment or lease it to another person or business in Oregon.

Non-profit organizations and public entities that do not have an Oregon tax liability may receive the credit for an eligible project but must “pass-through” or transfer their project eligibility to a pass-through partner in exchange for a lump-sum cash payment. The Oregon Department of Energy (ODOE) determines the rate that is used to calculate the cash payment. The pass-through option is also available to a project owner with an Oregon tax liability who chooses to transfer their tax credit. ODOE must grant preliminary and final certification for a project to be eligible. The taxpayer must have filed an application for the project before April 15, 2011, and ODOE must have granted preliminary certification for the project by July 1, 2011. Projects that began prior to April 15, 2011, must receive final certification by July 1, 2014. Projects that began after April 15, 2011, must receive final certification by July 1, 2013.

(Reference House Bills 3672 and 3606, 2011, and Oregon Revised Statutes 469.185-469.225 and 469.878)