Treasury, IRS Issue Proposed Rule on Expanded Alternative Fuel Vehicle Refueling Property Credit

The U.S. Department of the Treasury and Internal Revenue Service issued proposed regulations Sept. 19 to provide guidance for the Alternative Fuel Vehicle Refueling Property Credit (section 30C). Congress significantly amended the tax credit in the Inflation Reduction Act (IRA), which APTA strongly supported. The restructured section 30C tax credit applies to qualified alternative-fuel vehicle-refueling property placed in service from 2023 through 2032.

The section 30C provides a tax credit up to 30 percent of the cost of installing qualified alternative-fuel vehicle-refueling property, such as chargers and hydrogen refueling property. Under the proposed rule, the credit may be claimed by public transit agencies and businesses up to $100,000 for each single item of property placed in service in a low-income community or rural area. The proposed regulations provide guidance for determining whether a population census tract is an eligible census tract. According to the Treasury Department, approximately two-thirds of Americans live in eligible census tracts.

APTA sent a letter to the IRS in December 2022 offering comments on the section 30C Alternative Fuel Vehicle Property Credit and other IRA tax credits. APTA noted that the Inflation Reduction Act benefits “and urged DOT to continue to provide direct payments to public transit agencies that file claims for alternative fuels, biodiesel, and renewable diesel excise tax credits; ensure that public transit agencies, as tax-exempt entities, receive the property credit; and issue guidance to public transit agencies and other taxpayers on the requirement that the property be placed in service in a low-income community or rural census tract.”

APTA has held several subsequent meetings with Treasury Department staff to discuss the IRA tax credits, and the Sept. 19 Alternative Fuel Vehicle Refueling Property Credit NPRM meets each of APTA’s key objectives.