Search Federal and State Laws and Incentives

Qualified Plug-In Electric Vehicle (PEV) Tax Credit

A tax credit is available for the purchase of a new qualified PEV that draws propulsion using a traction battery that has at least five kilowatt-hours (kWh) of capacity, uses an external source of energy to recharge the battery, has a gross vehicle weight rating of up to 14,000 pounds, and meets specified emission standards. The minimum credit amount is $2,500, and the credit may be up to $7,500, based on each vehicle's traction battery capacity and the gross vehicle weight rating. The credit will begin to be phased out for each manufacturer in the second quarter following the calendar quarter in which a minimum of 200,000 qualified PEVs have been sold by that manufacturer for use in the United States. This tax credit applies to vehicles acquired after December 31, 2009. For more information, including qualifying vehicles and sales by manufacturer, see the Internal Revenue Service (IRS) PEV Credit website. Also refer to IRS Form 8936, which is available via the IRS Forms and Publications website.

(Reference Public Law 112-240, Section 403; and 26 U.S. Code 30D)

Reduced Alternative Fuel Vehicle (AFV) License Tax

The vehicle license tax for an AFV registered in Arizona is $4 for every $100 in assessed value. The minimum amount of the annual AFV license tax is $5. AFV assessed values are determined as follows:

• AFVs registered prior to January 1, 2022: 1% of the manufacturer’s suggested retail price (MSRP)
• AFVs initially registered between January 1, 2022 and December 31, 2022: 20% of the MSRP.

For the purpose of this tax, AFVs include those powered exclusively by propane, natural gas, electricity, hydrogen, or a blend of hydrogen with propane or natural gas. For more information, see the ADOT AFV website. The reduced alternative fuel vehicle license tax does not apply to any vehicle purchased on or after December 31, 2022.

(Reference Arizona Revised Statutes 1-215, 28-5801, 28-5805)

Alternative Fuel Vehicle (AFV) Conversion Tax Credit

Businesses and individuals are eligible for an income tax credit of up to 50% of the equipment and labor costs for converting vehicles to operate using alternative fuels. Qualified alternative fuels include natural gas, propane, hydrogen, electricity, and fuels containing at least 85% ethanol, methanol, ether, or another alcohol. The maximum credit is $500 for the conversion of vehicles with a gross vehicle weight rating (GVWR) of 10,000 pounds (lbs.) or less and $1,000 for vehicles with a GVWR of more than 10,000 lbs. The credit is only available for the year the business or individual converts the vehicle. An alternative fuel seller may not receive a credit for converting its own vehicles to operate on the alternative fuel it sells. (Reference Montana Code Annotated 15-30-2320)

Electric Vehicle Supply Equipment (EVSE) Tax Credit

An eligible business enterprise may claim an income tax credit for the purchase and installation of qualified EVSE. The EVSE must be located in Georgia and accessible to the public. The tax credit is for 10% of the cost of the EVSE, up to $2,500. For more information, including eligibility requirements, see the Georgia Department of Natural Resources Clean Vehicle Tax Credits website.

Alternative Fuel Tax Exemption

A county, city, village, town, or other political subdivision may not levy or collect any excise, license, privilege, or occupational tax on motor vehicle fuel, alternative fuels, or the purchase, sale, handling, or consumption of motor vehicle fuel or alternative fuels. (Reference Wisconsin Statutes 78.82)

Alternative Fuel Tax Exemption

The retail sale, use, storage, and consumption of alternative fuels is exempt from the state retail sales and use tax. (Reference North Carolina General Statutes 105-164.13)

Alternative Fuel Development Property Tax Exemption

Industrial property that is used for high-technology activities or the creation or synthesis of biodiesel fuel may be eligible for a tax exemption. High-technology activities include those related to advanced vehicle technologies such as electric, hybrid electric, or alternative fuel vehicles and their components. To qualify for the tax exemption, an industrial facility must obtain an exemption certificate for the property from the Michigan State Tax Commission. (Reference Michigan Compiled Laws 207.552 and 207.803-207.809)

Zero Emissions Vehicle (ZEV) Tax Exemption

ZEVs sold, rented, or leased in New Jersey are exempt from state sales and use tax. This exemption does not apply to partial ZEVs, including hybrid electric vehicles. ZEVs are defined as vehicles that meet California Air Resources Board zero emission standards for that model year. For a list of qualified ZEV, see the New Jersey Department of the Treasury ZEV Sales Tax Exemption website. (Reference New Jersey Statutes 54:32B-8.55)

Alternative Fuel and Alternative Fuel Vehicle (AFV) Use Tax Exemption

Arizona use taxes do not apply to natural gas or propane used in an AFV, AFVs converted to operate on alternative fuels, or the equipment used to convert a diesel vehicle to an AFV. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas. (Reference Arizona Revised Statutes 42-5159)

Alternative Fueling Infrastructure Tax Credit

For tax years beginning before December 31, 2027, a tax credit is available for up to 45% of the cost of installing commercial alternative fueling infrastructure. Eligible alternative fuels include natural gas, propane, and electricity. The infrastructure must be new and not previously installed or used to fuel alternative fuel vehicles. A tax credit is also available for up to 50% of the cost of installing a residential propane, compressed natural gas, or liquefied natural gas fueling system for noncommercial purposes, up to $2,500. The tax credit may be carried forward for up to five years. (Reference Oklahoma Statutes 68-2357.22)

Plug-In Electric Vehicle (PEV) Title Excise Tax Exemption

Qualified PEVs are exempt from the excise tax imposed on an original certificate of title. The original purchaser and subsequent purchasers of the same vehicle are eligible for the excise tax exemption. The District of Columbia Department of Motor Vehicles (DMV) determines which PEVs qualify. For more information, see the District of Columbia Department of Motor Vehicles website. (Reference District of Columbia Code 50-2201.03(j)(3)(J))

Alternative Fuel Tax Refund for Taxis

A person using alternative fuel to operate a taxi used to transport passengers may be reimbursed for the paid amount of the Wisconsin state fuel tax. Refund claims must be filed within one year of the fuel purchase date and must be for a minimum of 100 gallons of alternative fuel. (Reference Wisconsin Statutes 78.75(1m)(a)(1) and 78.75(1m)(b))

Alternative Fuel and Advanced Vehicle System Manufacturing Incentive

The Alternative Energy Product Manufacturers Tax Credit provides credit against combined reporting taxes (gross receipts, compensating, and withholding) for qualified manufacturers of alternative energy products, including hydrogen and fuel cell vehicle systems, and electric and hybrid electric vehicles. The credit is limited to 5% of qualifying expenditures, and manufacturers must fulfill job creation requirements to be eligible. Qualified manufacturers must apply for and receive approval from the New Mexico Taxation and Revenue Department before they may claim the credit. For more information, including eligibility and application details, refer to the Alternative Energy Product Manufacturers Tax Credit website. (Reference New Mexico Statutes 7-9J-1 through 7-9J-8)

Alternative Fuel Production Tax Credits

The High Quality Jobs Program offers state tax incentives to business projects for the production of biomass or alternative fuels. Incentives may include an investment tax credit equal to a percentage of the qualifying investment, amortized over five years; a refund of state sales, service, or use taxes paid to contractors or subcontractors during construction; an increase of the state's refundable research activities credit; and a local property tax exemption of up to 100% of the value added to the property. For more information, refer to the High Quality Jobs Program website. (Reference Iowa Code 15.335 and 422.10)

Electric Vehicle and Fuel Cell Electric Vehicle (FCEV) Infrastructure and Battery Tax Credit

Public lands used for installing, maintaining, and operating EVSE are exempt from leasehold excise taxes. Additionally, the state sales and use taxes do not apply to plug-in electric vehicle (PEV) and FCEV batteries or fuel cells; labor and services for installing, repairing, altering, or improving PEV and FCEV batteries or fuel cells and PEV and FCEV infrastructure; the sale of property used for PEV and hydrogen fueling infrastructure, and the sale of zero emission buses. (Reference Revised Code of Washington 82.29A.125, 82.08.816, and 82.12.816)

Alternative Fuel Vehicle (AFV) Tax Credit

Louisiana offers a nonrefundable income tax credit for new original equipment manufacturer AFVs purchased before July 1, 2021. A taxpayer may take a tax credit of 10% of the cost of the motor vehicle, up to $2,500. To qualify for the tax credit, vehicles must have a dedicated alternative fuel storage and delivery system and be registered in Louisiana. For the purpose of this incentive, alternative fuels include natural gas, propane, biofuel, biodiesel, methanol, ethanol, and electricity. (Reference Senate Bill 8, 2021, Louisiana Revised Statutes 47:6035, and Louisiana Administrative Code Title 61, Section 1913)

Provision for Green Jobs Tax Credit

Pending available funding, the Louisiana Department of Economic Development will offer a corporate or income tax credit for qualified capital infrastructure projects in Louisiana that are directly related to industries including, but not limited to, the advanced drivetrain vehicle and biofuels industries. The tax credit is for 7% to 18% of the project costs, calculated based on the investment costs, up to $1,000,000 per state-certified green project. The portion of the base investment expended on payroll for Louisiana residents employed in connection with the construction of the project may be eligible for an additional 7.2% tax credit on the payroll. Annual credits caps apply and credits will be distributed on a first-come, first-served basis to eligible recipients. Restrictions may apply. (Reference Louisiana Revised Statutes 47:6037)

Battery Manufacturing Tax Incentive

For taxation purposes, the taxable fair market value of manufacturing machinery and equipment purchased for use at a renewable energy manufacturing facility may be reduced by 20% of the original cost. Qualified renewable energy manufacturing facilities include those manufacturing batteries for hybrid electric, fuel cell, or other motor vehicles certified by the South Carolina Energy Office. Qualified facilities must invest at least $100 million in the project and create at least 200 new full-time jobs with an average compensation level of 150% of the annual per capita income in South Carolina or the county where the facility is located, whichever is less. Additional restrictions apply. (Reference South Carolina Code of Laws 12-10-30, 12-15-20, 12-15-30, 12-37-930)

Advanced Transportation Tax Exclusion

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides a sales and use tax exclusion for qualified manufacturers of advanced transportation products, components, or systems that reduce pollution and energy use and promote economic development. Incentives are available until December 31, 2025. For more information, including application materials, see the CAEATFA Sales and Use Tax Exclusion Program website. (Reference California Public Resources Code 26000-26017)

Alternative Fuel Tax Exemption

Alternative fuel distributed by or used for federal government, state government, or Indian nation, tribe, or pueblo purposes is exempt from the state excise tax. (Reference New Mexico Statutes 7-16B-5)

Propane and Electricity Tax Exemptions

Propane and electricity used to operate motor vehicles are exempt from state motor fuel taxes. For more information, see the Utah State Tax Commission Fuel Taxes website. (Reference Utah Code 59-13-102, 59-13-201, and 59-13-301)

Alternative Fuel and Advanced Vehicle Job Creation Tax Credit

A business that manufactures alternative energy products for use in battery, biofuel, and electric vehicle enterprises may claim an annual tax credit for five years. The amount of the tax credit is based on the number of eligible new full-time employee jobs. Qualified entities must be defined as business enterprises, which do not include retail businesses. Credit amounts differ depending on how the county in which the business is located ranks based on unemployment rates and income levels. Other conditions apply. (Reference Georgia Code 48-7-40)

Alternative Fuel Infrastructure Tax Credit

Fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed through December 31, 2021, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Permitting and inspection fees are not included in covered expenses. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchase qualified residential fueling equipment prior to December 31, 2021, may receive a tax credit of up to $1,000. Unused credits that qualify as general business tax credits, as defined by the Internal Revenue Service (IRS), may be carried backward one year and carried forward 20 years. For more information about claiming the credit, see IRS Form 8911, which is available on the IRS Forms and Publications website. (Reference Public Law 116-260, Public Law 116-94, Public Law 115-123, Public Law 114-113, 26 U.S. Code 30C and 38, and IRS Notice 2007-43)

Alternative Fueling Infrastructure Tax Credit

An income tax credit is available for 50% of the cost of alternative fueling infrastructure, up to $5,000. Qualifying infrastructure includes electric vehicle supply equipment and equipment to dispense fuel that is 85% or more natural gas, propane, or hydrogen. Unused credits may be carried over into future tax years. The credit expires December 31, 2022. For additional information, including information on how to claim the credit, please see the New York State Department of Taxation and Finance website. (Reference New York Tax Law 187-b)

Qualified Two-Wheeled Plug-In Electric Drive Motor Vehicle Tax Credit

A credit is available for the purchase of a new qualified two-wheeled plug-in electric drive vehicle that draws propulsion using a traction battery that has at least 2.5 kilowatt hours (kWh) of capacity, uses an external source of energy to recharge the battery, has a gross vehicle weight rating of up to 14,000 pounds, is manufactured primarily for use on public roadways, and can drive at least 45 miles per hour. The credit is for 10% of the cost of the qualified vehicle, up to $2,500. For more information about claiming the credit, see the Internal Revenue Service (IRS) Plug-In Electric Vehicle Credit website and IRS Form 8936, which is available on the IRS Forms and Publications website. (Reference Public Law 116-260, Public Law 116-94, Public Law 115-123, Public Law 114-113, and 26 U.S. Code 30D)

Alternative Fuel Vehicle (AFV) Conversion and Infrastructure Tax Credit

Businesses and individuals are eligible for an income tax credit of 50% of the equipment and labor costs for the conversion of qualified AFVs, up to $19,000 per vehicle. A tax credit is also available for 50% of the equipment and labor costs for the purchase and installation of alternative fuel infrastructure on qualified AFV fueling property. The maximum credit is $1,000 per residential electric vehicle charging station, and $10,000 per publicly accessible AFV fueling station. Qualified alternative fuels include, ethanol blends of at least 85%, natural gas, propane, biodiesel, electricity, and hydrogen. This incentive expires December 31, 2026. For more information, see the Office of Tax and Revenue website. (Reference District of Columbia Code 47-1806.12 through 47-1806.13, 47-1807.10 through 47-1807.11, and 47-1808.10 through 47-1808.11)

Qualified Heavy-Duty Alternative Fuel Vehicle (AFV) Tax Credit

Taxpayers may be eligible for a tax credit for the purchase of a qualified heavy-duty AFV. Qualifying fuels include natural gas, electricity, and hydrogen. Each qualified heavy-duty AFV is eligible for the following tax credit amounts:

At least 50% of the qualified vehicle's miles must be driven in the state. A single taxpayer may claim credits for up to 10 AFVs or $500,000 annually. If more than 30% of the total available tax credits in a single year have not been claimed by May 1, a taxpayer may apply for credits for an additional eight AFVs. Up to 25% of the tax credits are reserved for taxpayers with small fleets of less than 40 vehicles. Additional conditions and restrictions may apply. For more information, see the Alternative Fuel Heavy Duty Vehicle Tax Credit Program website.

(Reference Utah House Bill 91, 2021 and Utah Code 59-7-618, 59-10-1033, and 59-13-201)

Plug-In Electric Vehicle (PEV) Tax Credit

Qualified PEVs titled and registered in Colorado are eligible for a tax credit. Light-duty PEVs purchased, leased, or converted before January 1, 2026, are eligible for a tax credit equal to the amounts below, per calendar year:

Tax credits for conversations are available until January 1, 2022. The credit amount for any qualifying truck is limited to the difference in manufacturer's suggested retail price between the qualifying truck and a comparable truck that operates on either gasoline or diesel fuel. The credit that may be claimed for converting a truck to a qualifying truck is limited to the cost of conversion.

Eligible purchased vehicles must be new, and eligible leased vehicles must have a lease term of not less than two years. A purchaser may assign the tax credit generated through the purchase, lease, or conversion to any of the above categories of vehicle to the financing entity, allowing the purchaser to realize the value of the tax credit at the time of purchase, lease, or conversion. The financing entity may collect an administrative fee of no more than $150.

For more information, see the Colorado Department of Revenue's Income 69 FYI publication.

(Reference Colorado Revised Statutes 39-22-516.7 and 39-22-516.8)

Electric Vehicle Supply Equipment (EVSE) Rebates – Hawaii Energy

Hawaii Energy administers the Electric Vehicle Charging Station rebate program on behalf of the Hawaii Public Utilities Commission, which offers rebates to commercial and multifamily dwelling customers for the installation of Level 2 and direct current (DC) fast EVSE. Eligible applicants include individuals, non-profit organizations, private businesses, government entities, and homeowner associations or authorized entities on behalf of multi-unit dwellings. Rebates are available for new and retrofitted EVSE. Rebates are awarded on a first-come, first-served basis while funding lasts. A total of $100,000 is available for eligible EVSE projects installed between July 1, 2021, and June 30, 2022. For more information, including program eligibility and requirements, see the Hawaii Energy Electric Vehicle Charging Station website.

Non-Residential Electric Vehicle Supply Equipment (EVSE) Rebate – Connexus Energy

Connexus Energy offers commercial customers a rebate of up to $2,000 for the purchase and installation of Level 2 EVSE. Eligible applicants include public entities, workplaces, multifamily units, and fleets. For more information, see the Conexus Energy Electric Vehicle website.

Electric Vehicle Supply Equipment (EVSE) Rebate - Runestone Electric Association

Runestone Electric Association offers rebates to residential customers of up to $500 for the installation of Level 2 EVSE. To receive the full rebate, eligible applicants must enroll EVSE on a storage electricity rate of $0.469 per kilowatt hour. EVSE not installed on storage rates will receive $250. Application must be submitted within 60 days of purchase. For more information, see the Electric Vehicle website.

Alternative Fueling Infrastructure Tax Credit

Louisiana offers a nonrefundable income tax credit of 30% of the cost of purchasing and installing qualified clean-burning motor vehicle fuel property. Qualified clean-burning motor vehicle fuel property is defined as:

• Alternative fueling delivery equipment including compression equipment, storage tanks, and dispensing units for alternative fuel at the point where the fuel is delivered, and;
• Purchase of property which is directly related to the delivery of an alternative fuel for use in alternative fuel vehicles.