Tax Article - Alternative Fuel Excise Tax Credit

If you used an alternative fuel or an alternative fuel mixture for sale or use in your trade or business, you may be eligible for a credit or refund until September 30, 2009 (September 30, 2014, in the case of any sale or use involving liquefied hydrogen). An alternative fuel mixture is a mixture of alternative fuel and taxable fuel (gasoline, diesel fuel, or kerosene). You must sell the mixture to any person for use as a fuel or use the mixture as a fuel. The alternative fuel credit is the product of 50 cents and the number of gallons of an alternative fuel or gasoline gallon equivalents of a nonliquid alternative fuel sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, or so used by the taxpayer. The amount of the credit for compressed natural gas is $0.50 per 121 cubic feet.

A claim for alternative fuel excise tax credit claim is allowed only if the claimant:

• Is the alternative fueler (unmixed fuel) with respect to the fuel,
• Is registered under § 4101 as an alternative fueler; or in the case of a claim made before July 1, 2007, is registered under § 4101 for any purpose,
• Made no other claim with respect to the alternative fuel,
  Has filed a timely claim on Form 720, Quarterly Federal Excise Tax Return, and the claim contains all the information required by the claim form, and
• Has § 4041 liability for the period of the claim and the total amount of the alternative fuel excise tax credit claimed under § 6426 for the period of the claim does not exceed such liability.

For purposes of the alternative fuel credit or alternative fuel mixture credit, alternative fuel means:

• Liquefied petroleum gas,
• Compressed natural gas,
• Liquefied natural gas,
• Liquefied hydrogen,
• Liquid fuel derived from coal (including peat) through the Fischer-Tropsch process,
• Liquid fuel derived from biomass (as defined in Internal Revenue Code section 45K(c)(3)), or
• P Series Fuels (as defined under section 13211(2) of title 42 (United States Code).
  

Alternative fuel does not include ethanol, methanol, biodiesel, or renewable diesel.

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