On July 22, the Senate Committee on Finance passed a package of tax credits known as Tax Extenders that includes a wide variety of tax incentives for businesses and energy companies.
Most important for APGA members is the fact that the Tax Extenders legislation includes two key pro-natural gas vehicles (NGV) credits, including:
- An alternative fuel vehicle refueling property credit, also known as Alternative Fuel Infrastructure Credit, which covers up to 30 percent of the cost of the project capped at $30,000; and,
- An alternative fuel credit, which provides a 50 cent/gallon credit for sales of compressed natural gas (CNG) and liquefied natural gas (LNG) sold for use in motor vehicles.
Under the bill, both credits would be retroactive back to December 31, 2014 and would expire on December 31, 2016, a full two year extension of these essential tax credits. In addition, Senator Burr (R-N.C.) and Senator Bennet (D-Colo.) successfully passed an amendment to the bill that would correct the existing LNG Excise Tax inequity, which would effectively tax LNG at 14.1 cents per gallon of diesel.
There are two key hurdles to adoption of the Tax Extenders bill: cost and competing priorities. First, the Tax Extenders package reported out of committee will cost $95 billion, presenting an enormous challenge for Congress to find offsets to avoid adding to the deficit and debt. Second, Congress is trying to pass legislation to extend surface transportation programs before the Highway Trust Fund runs out of funding at the end of July. Similar to the Tax Extenders bill, Congress will have to find offsets for that legislation if it doesn’t want to add to the deficit/debt. It appears that the surface transportation bill is the higher priority, so the Tax Extenders bill will likely be delayed and modified before any attempted passage. APGA will keep members informed of any developments with this legislation.
For questions on this article, please contact Scott Morrison of APGA staff by phone at 202-464-2742 or by email at smorrison@apga.org.