Printable Version

Expired, Repealed, and Archived Federal Incentives and Laws

The following is a list of expired, repealed, and archived incentives, laws, regulations, funding opportunities, or other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality.

Clean Air Act Amendments of 1990

The Clean Air Act Amendments (CAAA) of 1990 amended the original Clean Air Act (CAA) of 1970. The CAAA of 1990 created several initiatives to reduce mobile source pollutants, thereby pursuing one of the original goals of CAA. The CAAA establishes standards and procedures for reducing human and environmental exposure to a range of pollutants generated by industry and transportation. States have to develop state implementation plans that explain how they will carry out initiatives outlined by the CAAA. The U.S. Environmental Protection Agency assists the states by providing scientific research, expert studies, engineering designs and money to support clean air programs. For more information, visit the EPA's Plain English Guide to the Clean Air Act.

Alternative Fuel Excise Tax Credit

A tax incentive is available for alternative fuel that is sold for use or used as a fuel to operate a motor vehicle. A tax credit in the amount of $0.50 per gallon is available for the following alternative fuels: compressed natural gas (based on 121 cubic feet), liquefied natural gas, liquefied petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. For an entity to be eligible to claim the credit they must be liable for reporting and paying the federal excise tax on the sale or use of the fuel in a motor vehicle. Tax exempt entities such as state and local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify for the incentive. Eligible entities must be registered with the Internal Revenue Service (IRS). The incentive must first be taken as a credit against the entity's alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637, 720, 4136, and 8849, which are available via the IRS website. (Reference Public Law 111-312, Section 704; and 26 U.S. Code 6426)

Alternative Fuel Infrastructure Tax Credit

Fueling equipment for natural gas, liquefied petroleum gas (propane), electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed through December 31, 2011, is eligible for a tax credit of 30% of the cost, not to exceed $30,000. Fueling station owners who install qualified equipment at multiple sites are allowed to use the credit towards each location. Consumers who purchased qualified residential fueling equipment prior to December 31, 2011, 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, see IRS Form 8911, which is available via the IRS website. (Reference Public Law 111-312, Section 711, and 26 U.S. Code 30C and 38)

Alternative Fuel Mixture Excise Tax Credit

An alternative fuel blender that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive on the sale or use of the alternative fuel blend (mixture) for use as a fuel in the blender's trade or business. The credit is in the amount of $0.50 per gallon of alternative fuel used to produce a mixture containing at least 0.1% gasoline, diesel, or kerosene. Qualified alternative fuels are: compressed natural gas (based on 121 cubic feet), liquefied natural gas, liquefied petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and compressed or liquefied gas derived from biomass. The incentive must first be taken as a credit against the blender's alternative fuel tax liability; any excess over this fuel tax liability may be claimed as a direct payment from the IRS. The tax credit is not allowed if an incentive for the same alternative fuel is also determined under the rules for the ethanol or biodiesel tax credits. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637, 720, 4136, and 8849, which are available via the IRS website. (Reference Public Law 111-312, Section 704; and 26 U.S. Code 6426)

Biodiesel Income Tax Credit

A taxpayer that delivers pure, unblended biodiesel (B100) into the tank of a vehicle or uses B100 as an on-road fuel in their trade or business may be eligible for an incentive in the amount of $1.00 per gallon of biodiesel, agri-biodiesel, or renewable diesel. If the biodiesel was sold at retail, only the person that sold the fuel and placed it into the tank of the vehicle is eligible for the tax credit. The incentive is allowed as a credit against the taxpayer's income tax liability. Claims must include a copy of the certificate from the registered biodiesel producer or importer that: identifies the product; specifies the product's biodiesel, agri-biodiesel, and/or renewable diesel content; confirms that the product is properly registered as a fuel with the U.S. Environmental Protection Agency (EPA); and confirms that the product meets the requirements of ASTM specification D6751. Renewable diesel is defined as liquid fuel derived from biomass that meets EPA's fuel registration requirements and ASTM specifications D975 or D396; the definition of renewable diesel does not include any fuel derived from co-processing biomass with a feedstock that is not biomass. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637 and 8864, which are available via the IRS website. (Reference Public Law 111-312, Section 701; and 26 U.S. Code 40A)

Biodiesel Mixture Excise Tax Credit

A biodiesel blender that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive in the amount of $1.00 per gallon of pure biodiesel, agri-biodiesel, or renewable diesel blended with petroleum diesel to produce a mixture containing at least 0.1% diesel fuel. Only blenders that have produced and sold or used the qualified biodiesel mixture as a fuel in their trade or business are eligible for the tax credit. The incentive must first be taken as a credit against the blender's fuel tax liability; any excess over this tax liability may be claimed as a direct payment from the IRS. Claims must include a copy of the certificate from the registered biodiesel producer or importer that: identifies the product; specifies the product's biodiesel, agri-biodiesel, and/or renewable diesel content; confirms that the product is properly registered as a fuel with the U.S. Environmental Protection Agency; and confirms that the product meets the requirements of ASTM specification D6751. Renewable diesel is defined as liquid fuel derived from biomass that meets EPA's fuel registration requirements and ASTM specifications D975 or D396; the definition of renewable diesel does not include any fuel derived from co-processing biomass with a feedstock that is not biomass. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637, 720, 4136, 8849, and 8864, which are available via the IRS website. (Reference Public Law 111-312, Section 701; and 26 U.S. Code 6426)

Small Agri-Biodiesel Producer Tax Credit

A small agri-biodiesel producer that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive in the amount of $0.10 per gallon of agri-biodiesel that is: sold and used by the purchaser in the purchaser's trade or business to produce an agri-biodiesel and diesel fuel mixture; sold and used by the purchaser as a fuel in a trade or business; sold at retail for use as a motor vehicle fuel; used by the producer in a trade or business to produce an agri-biodiesel and diesel fuel mixture; or used by the producer as a fuel in a trade or business. A small producer is one that has, at all times during the tax year, not more than 60 million gallons of productive capacity of any type of agri-biodiesel. Agri-biodiesel is defined as diesel fuel derived solely from virgin oils, including esters derived from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats; renewable diesel does not qualify for the credit. The incentive applies only to the first 15 million gallons of agri-biodiesel produced in a tax year is allowed as a credit against the producer's income tax liability. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637 and 8864, which are available via the IRS website. (Reference Public Law 111-312, Section 701; and 26 U.S. Code 40A)

Small Ethanol Producer Tax Credit

A small ethanol producer that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive in the amount of $0.10 per gallon of ethanol that is: sold and used by the purchaser in the purchaser's trade or business to produce an ethanol fuel mixture; sold and used by the purchaser as a fuel in a trade or business; sold at retail for use as a motor vehicle fuel; used by the producer in a trade or business to produce an ethanol fuel mixture; or used by the producer as a fuel in a trade or business. A small producer is one that has, at all times during the tax year, not more than 60 million gallons of productive capacity of any type of alcohol. The incentive applies only to the first 15 million gallons of ethanol produced in a tax year and is allowed as a credit against the producer's income tax liability. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637 and 6478, which are available via the IRS website. (Reference Public Law 111-312, Section 708; and 26 U.S. Code 40)

Volumetric Ethanol Excise Tax Credit (VEETC)

An ethanol blender that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive in the amount of $0.45 per gallon of pure ethanol (minimum 190 proof) blended with gasoline. Only entities that have produced and sold or used the qualified mixture as a fuel in their trade or business are eligible for the tax credit. The incentive must first be taken as a credit against the blender's fuel tax liability; any excess over this tax liability may be claimed as a direct payment from the IRS. This tax credit expired December 31, 2011. For more information, see IRS Publication 510 and IRS Forms 637, 720, 4136, 6478, and 8849, which are available via the IRS website. (Reference Public Law 111-312, Section 708; and 26 U.S. Code 6426)

Light-Duty Hybrid Electric Vehicle (HEV) and Advanced Lean Burn Vehicle Tax Credit

A tax credit is available for qualified light-duty HEVs and advanced lean burn technology vehicles placed into service after December 31, 2005. The Internal Revenue Service (IRS) must first acknowledge the manufacturers' certifications of qualified vehicles and credit amounts, which are determined using a formula that accounts for improved fuel economy and lifetime fuel savings potential. The credit begins to phase out in the second quarter following the calendar quarter in which at least 60,000 of a manufacturer's qualifying HEVs and/or lean burn passenger automobiles and light trucks have been sold. See the IRS Qualified Hybrid Vehicles and IRS Qualified Advanced Lean Burn Technology Vehicles websites for the current list of qualified vehicles, credits, phase-out schedules, and required forms. This tax credit expires December 31, 2010. (Reference 26 U.S. Code 30B)

Qualified Alternative Fuel Motor Vehicle (QAFMV) Tax Credit

A tax credit is available toward the purchase of QAFMVs, which may be either new, original equipment manufacturer vehicles or vehicles that have been repowered by an aftermarket conversion company to operate on an alternative fuel. Qualifying alternative fuels are those powered by natural gas, liquefied petroleum gas, hydrogen, and fuel containing at least 85% methanol. The vehicle must be placed into service as an alternative fuel vehicle on or after January 1, 2006. Unused credits that qualify as general business tax credits, as defined by the IRS, may be carried backward one year and carried forward 20 years. Vehicle manufacturers must follow the procedures as published in Notice 2006-54 in order to certify to the Internal Revenue Service (IRS) that a vehicle meets the requirements to claim the QAFMV credit and confirm the allowable credit with respect to that vehicle. See the IRS QAFMV website for the current list of qualified vehicles and credits. For more information, see IRS Form 8910, which is available via the IRS website. This tax credit expires December 31, 2010. (Reference 26 U.S. Code 30B)

Heavy-Duty Hybrid Electric Vehicle (HEV) Tax Credit

A tax credit of up to $18,000 is available for the purchase of qualified heavy-duty HEVs with a gross vehicle weight rating of more than 8,500 pounds. Vehicle manufacturers must follow the procedures published in Notice 2007-23 to certify to the Internal Revenue Service (IRS) that a heavy-duty vehicle meets the requirements to claim the heavy-duty HEV credit and confirm the amount of the allowable credit with respect to that vehicle. See the IRS Heavy Hybrid Vehicles website for the current list of qualified vehicles and credits. (Reference 26 U.S. Code 30B)

High Occupancy Vehicle (HOV) Lane Exemption

States are allowed to exempt certified low emission and energy-efficient vehicles from HOV lane requirements within the state. Eligible vehicles must be certified by the U.S. Environmental Protection Agency (EPA) and appropriately labeled for use in HOV lanes. The EPA issued a Notice of Proposed Rulemaking in May 2007 and a final rule is expected in September 2008. The Department of Transportation is responsible for planning and implementing HOV programs, including the exemption criteria established by EPA. States that choose to adopt these requirements will be responsible for enforcement and vehicle labeling. The HOV exemption for low emission and energy-efficient vehicle expires September 30, 2009. For more information, including a draft list of eligible vehicles based on the most recent certification data available to EPA, visit the HOV Exemption website. (Reference 23 U.S. Code 166)

Car Allowance Rebate System

The Car Allowance Rebate System (CARS) is a voluntary incentive program designed to encourage consumers to trade in older, less fuel-efficient cars and trucks for newer, more fuel-efficient vehicles. The U.S. Department of Transportation's National Highway Traffic Safety Administration will administer the program. Consumers may receive $3,500 or $4,500 credit toward the purchase or lease of a new, qualified fuel-efficient vehicle at a participating dealership. The incentive amount depends on the type of vehicle purchased and the improvement in fuel economy of the purchased vehicle as compared to the eligible trade-in vehicle. In general, eligible trade-in vehicles must have a combined city/highway fuel economy rating of 18 miles per gallon or less, be in drivable condition, be less than 25 years old, and registered and insured for the full year prior to trade-in. The program will end November 1, 2009, or when funds authorized for the program are exhausted. For more information, including additional eligibility requirements, see the CARS Web site. (Reference Public Law 111-32, and 49 CFR 512 and 599)

Idle Reduction Facilities Regulation

The following was repealed by target="_blank">Public Law 110-244: States are permitted to provide facilities in interstate system rights-of-way that allow operators of commercial vehicles to reduce truck idling or use alternate power sources. States may allow idling reduction facilities for commercial vehicles to be placed in rest or recreation areas as well as in safety rest areas constructed or located on rights-of-way of the interstate system. The idling reduction facilities must not reduce the existing number of truck parking spaces at a given rest or recreation area. States may charge a fee or permit charging a fee, for parking spaces actively providing idling reduction measures. For more information, see the Idling Reduction Facilities in Interstate Rights-of-Way fact sheet. (Reference 23 U.S. Code 111)

Electric Vehicle Tax Credit

A tax credit for the purchase of qualified electric vehicles is provided under Section 179A of the Energy Policy Act of 1992; it was extended through 2007 by the Working Families Tax Relief Act of 2004. IRS Form 8834 (PDF 368 KB) can be used to calculate the credit for qualified electric vehicles placed in service. Download Adobe Reader. The credit amount equals 10% of the cost of the vehicle up to $4,000. This credit is scheduled to be reduced by 75% in 2006 and expire in 2007. To qualify for the credit, the vehicle must be powered primarily by an electric motor drawing current from batteries or other portable sources of electricity. All dedicated, plug-in-only electric vehicles qualify for the tax credit, which is available for business or personal vehicles. A tax deduction of up to $100,000 per location is available for qualified electric vehicle recharging property used in a trade or business.

Petroleum Violation Escrow Account

Oil overcharge funds, also known as petroleum violation escrow (PVE) funds, came from fines paid by oil companies in violation of the federal oil price caps in place from 1973-1981. These funds may be used for energy efficiency and renewable energy projects. More than half the account's money is channeled through the U.S. Department of Energy's (DOE) State Energy and Weatherization Assistance Programs and the U.S. Department of Health and Human Services' Low-Income Home Energy Assistance Program. These programs grant funds (with DOE review) to states for a broad range of energy-related programs. To date, more than $4 billion in PVE funds have been made available to states. For more information, contact Faith Lambert, DOE, Office of State and Community Programs, at (202) 586-2319, faith.lambert@hq.doe.gov, or your State Energy Office (listed under your state's Points of Contact section).