United States (Federal) Alternative Fuel Purchaser
Energy Independence and Security Act of 2007 Signed Into Law
President Bush signed the Energy Independence and Security Act (EISA) of 2007 (House Resolution 6), designed to improve vehicle fuel economy and help reduce U.S. dependence on oil. EISA aims to increase the supply of alternative fuel sources by setting a mandatory Renewable Fuel Standard (RFS) requiring transportation fuel sold in the U.S. to contain a minimum of 36 billion gallons of renewable fuels by 2022, including advanced and cellulosic biofuels and biomass-based diesel. In addition, the law requires the Corporate Average Fuel Economy (CAFE) standard to reach 35 miles per gallon by the year 2020. The EISA is projected to reduce energy consumption by 7% and greenhouse gas emissions by 9% by 2030. For a summary of the major provisions set forth by the legislation, visit the Energy Independence and Security Act of 2007 page of the Federal Incentives & Laws Web site. The complete legislation can be viewed on the Library of Congress Web site.
Alternative Fuel Tax Exemption
Alternative fuels used in a manner that the Internal Revenue Service (IRS) deems as nontaxable are exempt from federal fuel taxes. Common nontaxable uses in a motor vehicle are: on a farm for farming purposes; in certain intercity and local buses; in a school bus; exclusive use by a nonprofit educational organization; and exclusive use by a state, political subdivision of a state, or the District of Columbia. This exemption is not available to tax exempt entities that are not liable for excise taxes on transportation fuel. For more information, see IRS Publication 510, which is available via the IRS Web site.
Point of Contact
Excise Tax Branch
U.S. Internal Revenue Service Office of Chief Counsel
Phone (202) 622-3130
http://www.irs.gov/
Alternative Fuel Definition - Internal Revenue Code
The Internal Revenue Service (IRS) defines alternative fuels as liquefied petroleum gas, compressed natural gas, liquefied natural gas, liquefied hydrogen, liquid fuel derived from coal through the Fischer-Tropsch process, liquid hydrocarbons derived from biomass, and P-Series fuels. Biodiesel, ethanol, and renewable diesel are not considered alternative fuels by the IRS. While the term "hydrocarbons" includes liquids that contain oxygen, hydrogen, and carbon and as such "liquid hydrocarbons derived from biomass" includes ethanol, biodiesel, and renewable diesel, the IRS specifically excluded these fuels from the definition. (Reference 26 U.S. Code 6426)
Point of Contact
U.S. Internal Revenue Service
Phone (800) 829-1040
http://www.irs.gov/
Emergency Economic Stabilization Act/Energy Improvement and Extension Act of 2008
The Emergency Economic Stabilization Act (House Resolution 1424) was signed by President Bush, enacting the Energy Improvement and Extension Act of 2008. The bill amends and extends existing biodiesel blending and production tax credits, extends existing alternative fuel excise tax credit, and extends the alternative fueling infrastructure tax credit. The bill also creates a new tax incentive toward the purchase of qualified plug-in hybrid electric vehicles, based on vehicle weight and battery capacity. Additionally, qualified idle reduction devices are exempt for heavy-duty truck retail excise taxes.
