Along with the tax incentive for fleets on equipment purchases that extended a “bonus dep¬re¬ca¬tion” that had expired on Dec. 31, there was more good news on resolution of the “fiscal cliff” crisis in Washington. NAFA Fleet Management Association applauded the bill signed into law on January 1 that contained the Extension of Alternative Fuels Excise Tax. This incentive helps just the use of biodiesel and alternative fuel vehicles for thousands of fleets. The bill included a continuation of a $1 per gallon tax credit for biodiesel and a $0.50 per gallon alternative fuel tax credit for natural gas and propane autogas throughout 2013. The bill also retroactively covers fuel produced in 2012 after the tax credit had expired. “This tax credit is very important to fleet managers, who have typically been the early adopters of alternative fuels,” said NAFA Executive Director, Phillip Russo. “In recent months, NAFA urged members whose fleets were impacted by these credits to contact their elected officials in Washington, D.C. The reinstatement proves that there is strength in numbers.”
The biodiesel credit is reflected in the price a fleet pays for fuel, and thus is a significant factor in projecting fuel costs. The $1-per-gallon biodiesel tax incentive was first implemented in 2005. Congress allowed it to lapse in 2010 and again in 2012. Without the tax incentive, biodiesel is significantly more expensive than conventional diesel fuel – making it more difficult to make the business case for biodiesel.
