Clean Fuel Vehicle Incentives
(updated April, 2016)
The following is a summary of current State and Federal programs that help defray the cost of switching to alternative fuels:
Maine State Tax Incentives
The State of Maine has enacted legislation that provides incentives for the purchase and operation of Clean Fuel Vehicles. Businesses, municipalities, and individuals can now save money when adding clean, alternative fuel vehicles to their fleet.
Fuel Tax Equalization for Clean Fuels in Maine
Beginning October 1, 2000, the State Highway tax on clean fuels was equalized to gasoline according to their relative energy (BTU) content by volume. In 2008, adjustments were made and some fuels were added. Beginning in July 2009, ethanol and biodiesel blends up to 90% are taxed at gasoline and diesel rates, respectively. All fuels have been indexed relative to the tax on the petroleum product that they displace.
|Fuel Type||BTU content per gallon||Formula (BTU value fuel/BTU value gasoline)||Tax Rate|
|Gasoline||115,000||100% x $0.30||$0.300 per gallon|
|Methanol (M85)||65,530||57% x $0.30||$0.147 per gallon|
|Ethanol (E85)||81,850||71% x $0.30||$0.198 per gallon|
|Propane (LPG)||84,500||73% x $0.30||$0.219 per gallon|
|CNG||93,150*||81% x $0.30||$0.243 per 100 SCF*|
|Hydrogen||26,450||23% x $0.30||$0.070 per 100 SCF*|
|HCNG***||79,733*||69% x $0.30||$0.208 per SCF*|
|Diesel||128,400||100% x $0.312||$0.312 per gallon|
|LNG***||73,500||57% x $0.312||$0.178 per gallon|
|BioDiesel (B100)||118,300||92% x $0.312||$0.287 per gallon|
|*Based on 100 standard cubic feet (SCF)
** Hydrogen Compressed Natural Gas *** Liquefied Natural Gas
Biofuels Production Tax Credit
A certified commercial biofuel producer is eligible for an income tax credit of $0.05 per gasoline gallon equivalent of biofuel produced for use in motor vehicles or otherwise used as a substitute for liquid fuels. Biofuel is defined as ethanol, biodiesel, hydrogen, methanol, or any other transportation fuel derived from agricultural crops or residues, or from forest products or byproducts. A taxpayer claiming this credit must receive a letter from the Maine Department of Environmental Protection that certifies the biofuels produced during the taxable year are eligible for the tax credit. For biofuels blended with petroleum or other non-biofuels, the credit is allowed only on the biofuels portion of that blend. Any portion of unused credits may be carried over for up to 10 taxable years
Auto Insurance Incentives
Insurers are allowed, but not required, to offer incentive rates to encourage policyholders to use clean fuel vehicles. Ask your agent. Many vehicle manufacturers offer incentives as well.
Biodiesel Fuel Tax Exemption
An individual that produces biodiesel for personal use or use by a member of his or her immediate family is exempt from the state fuel excise tax.
Federal Loans and Tax Incentives
In addition to Maine State incentives, taxpayers can also take advantage of Federal loan and tax incentives. For more details, visit the Department of Energy Alternative Fuels and Advanced Vehicles Data Center at http://www.afdc.energy.gov/laws/fed_summary
Improved Energy Technology Loans
The U.S. Department of Energy (DOE) provides loan guarantees through the Loan Guarantee Program to eligible projects that reduce air pollution and greenhouse gases, and support early commercial use of advanced technologies, including biofuels and alternative fuel vehicles. The program is not intended for research and development projects. DOE may issue loan guarantees for up to 100% of the amount of the loan for an eligible project. For loan guarantees of over 80%, the loan must be issued and funded by the Treasury Department’s Federal Financing Bank. For more information, see the Loan Guarantee Program website.
New Plug-in Car Purchases
Buyers of plug-in hybrids and electric cars benefit from a tax credit of $2,500 to $7,500, depending on the size of the battery in the car. On the low end of the spectrum, cars with 4 kWh battery packs will qualify for a $2,500 tax credit. The credit maxes out at $7,500 for cars with a 16 kWh battery pack, like the Chevy Volt. The credits were provided as part of the American Recovery and Reinvestment Act, otherwise known as the “stimulus bill.” The incentive begins phasing out after an automaker sells 200,000 vehicles that are eligible for the credit. More information
Better Electricity Rates
Many electric utilities around the country offer special rates, including time-of-use (TOU) rates, to reduce the cost of powering an electric car or plug-in hybrid. The reduced EV rate can significantly reduce the cost of charging your car. Check with your local utility company for exact rates and other details.
Discounts on Insurance
Several major insurance companies, such as Farmers, offer discounts of 5 percent or more for owners of electric and hybrid cars. Inquire with your insurance agent for details. We will continue to investigate which companies offer the best rates for EV owners and will post to this page.
Some states offer EV buyers and businesses a credit for the purchase and costs of charging equipment. On Friday, December 18, 2015, President Obama signed the Consolidated Appropriations Act of 2016 (H.R. 2029). Division Q, the Protecting Americans from Tax Hikes Act (PATH Act), retroactively extending the tax credit for EV charging infrastructure for 2015 and going forward for 2016 (www.afdc.energy.gov) Alternative Fuel Infrastructure Tax Credit. Section 182 extends the tax credit for alternative fuel infrastructure through December 31, 2016. Fueling equipment and related infrastructure for electricity are eligible for a tax credit of 30 percent, up to $30,000. Retroactive for EV Charging Infrastructure placed in service in 2015. This means if you installed EV charging in 2015, you can take advantage of this credit for your investment. Residential fueling equipment may receive a tax credit up to $1,000.
Drivers converting a car into a plug-in hybrid, or a gas-powered car into an electric vehicle, had received a tax credit equal to 10 percent of the conversion cost. But that federal incentive ended on December 31, 2011. Individual states, such as Colorado and Florida, provide additional incentives, such as rebates and state tax credits.
Source: http://www.plugincars.com/, accessed: April 13th, 2016
Idle Reduction Equipment Incentive
Qualified on-board idle reduction devise and advanced insulation are exempt from the federal excise tax imposed on the retail sale of heavy-duty highway trucks and trailers. The exemption also applies to the installation of qualified equipment on vehicles after the vehicles have been placed into service. For a list of eligible products and additional information about product exemption eligibility criteria, see the US Environmental Protection Agency’s (EPA) SmartWay Technology Program Federal Excise Tax Exemption website. For more information contact the U.S. IRS at (202) 622-3130 or go to http://www.irs.gov/