The Alternative Fuel Vehicle Refueling Property Tax Credit Updates
In the 1990s, amid escalating gasoline costs and increasing environmental awareness, consumer interest surged in vehicles fueled by alternative sources. In reaction to this trend, the US government introduced a tax incentive to facilitate the setup of storage and dispensing facilities for alternative fuels. Over time, this incentive evolved into a tax credit, extending its benefits to equipment essential for recharging electric vehicles (EVs).
The Alternative Fuel Vehicle Refueling Property Tax Credit, (IRC Section 30C), extended and modified by the Inflation Reduction Act (IRA), offers incentives for installing qualified refueling property for clean-burning fuels or electric vehicles. This credit applies to businesses and individuals who install such property in the U.S. or its territories. As of January 1, 2023, qualifying property is limited to eligible census tracts, including charging stations for electric vehicles.
Certain criteria must be met for the property to be eligible:
It must be placed in service during the tax year.
Its original use must begin with the taxpayer.
It should primarily be used in the U.S. and U.S. territories.
If not used for business or investment purposes, it should be installed on the property used as the taxpayer's main home.
The credit amount varies based on depreciation and wage requirements, ranging from 6% with a maximum credit of $100,000 per item for depreciable property to a 30% credit with the same limit for businesses meeting wage requirements. The credit is 30% of the cost of the property not subject to depreciation and capped at $1,000 per item.Some utility companies across the country offer incentives large enough to make the EV charger almost no cost to a business when taken along with IRC Section 30C.
Additionally, there are a variety of programs and incentives offered at the national level for state and local jurisdictions, including:
The National Electric Vehicle Infrastructure Formula Program provides $5B for EV charging infrastructure along 75,000 miles of highway, requiring organizations to be within one mile of an alternative fuel corridor and meeting other criteria.
In nearly every state across the country, at the state, county, and/or city level, various incentives are available to help make alternative fuel stations more accessible to residents and businesses.
In conjunction with federal and state or city incentives, utility companies also offer incentives to cover the cost of charging equipment. After the 30C tax credit covers up to 30% of the costs associated with installing EV charging stations, the utility companies may cover a portion of the cost. With the remaining funds, the issuing state will cover up to a certain percentage of the remaining eligible costs. By stacking the incentives, businesses can fully benefit from installing EV charging stations. Some states do not allow stacking of the NEVI incentive with other state grants and rebates; however, 30C incentives and utility costs remain viable.
The list, below, details examples of the incentives and programs available for taxpayers at the state level:
New York State
New York's EV Make-Ready Program, provided by investor-owned electric utilities, offers rebates covering up to 90% of installation costs for commercial charging stations, including AC Level 2 and DC fast chargers, with an additional annual incentive for operating public DC fast chargers, and interested parties can contact ChargePoint for details.
Central Hudson's EV Make-Ready Program offers incentives to reduce upfront costs for building electric vehicle charging stations, including installation of Level 2 (L2) and/or Direct Current Fast Charging (DCFC) chargers, which can earn incentives that will offset a large portion of, or in some cases, all infrastructure costs associated with preparing a site for EV charger installation.
The ConEdison PowerReady Electric Vehicle (EV) Charging Infrastructure Program offers installation and funding support for Level 2 and DCFC stations, with certain sites eligible for up to 100% incentives if they meet specific criteria.
New York State provides a tax credit of up to $5,000 for the purchase and installation of commercial and workplace electric vehicle charging stations.
National Grid NY's Make-Ready Program offers over $200M in rebates for electrical infrastructure costs for Level 2 and DC fast-charging projects, with certain sites eligible for up to 100% incentives based on specific criteria.
National Grid's Clean Transportation Program offers annual incentives to business customers with DCFC stations, based on power capacity, available until 2025 on a first-come, first-served basis, with varying incentive percentages depending on the station's power rating.
NYSERDA's Charge Ready NY 2.0 provides incentives for installing Level 2 EV charging stations at workplaces, multi-unit dwellings, or public facilities owned by municipal or state government entities, with funds awarded on a first-come, first-served basis and approximately $10.8 million remaining. These incentives cannot be combined with the NEVI incentives.
NYSERDA is offering $100M through the New York School Bus Incentive Program for deploying electric school buses and installing chargers, with reimbursement of up to $25,000 - $65,000 per Charging Voucher, awarded on a first-come, first-served basis.
NYSEG's Make-Ready Program offers over $103M in rebates for electrical infrastructure costs for Level 2 and DC fast-charging projects, with certain sites eligible for up to 100% incentives based on specific criteria.
Colorado
Charge Ahead Colorado initiative provides grant funding for community-based Level 2 and DC fast charging stations, including public access, multi-family, or workplace locations, in which Colorado residents can have 80% of the total costs covered, making it possible to profit from installing an EV charger when combined with the 30C credit and utility incentives. In the state of Colorado, this grant funding cannot be combined with the NEVI incentive.
Xcel Energy's EV Rebate Program offers financial incentives of up to $5,500 for income-qualified residents in Colorado to lower the upfront costs of purchasing electric vehicles and promote cleaner transportation. This incentive can be stacked with the Colorado State EV Credit and CO Vehicle Exchange program.
The Colorado Energy Office's DCFC Plazas program aims to install fast-charging stations for electric vehicles at strategic locations across the state to support long-distance travel and increase access to charging infrastructure; the program focuses on ensuring equitable access to charging for all communities, including underserved and rural areas.
Poudre Valley REA's EV Rebate Program offers financial incentives to members for purchasing electric vehicles and installing home charging stations, aiming to reduce the cost and encourage the adoption of EVs, which includes Level 2 rebates of up to $1,000 for EV Charger purchases and Level 3 Fast Charging rebates of up to $7,000.
Holy Cross Energy's Charge at Home program provides rebates and support to members for installing home electric vehicle charging stations, promoting the adoption of electric vehicles. The program offers a rebate for the cost of an approved Level 2 charger up to $549.
United Power's EV Program offers rebates and resources to encourage electric vehicle adoption and the installation of home charging stations, including rebates for at-home EV charging equipment and installation.
California
California offers various programs locally and statewide to enhance affordability for electric vehicle charging stations and vehicle electrification. The NEVI incentive cannot be combined with other California state or utility incentives; however, these rules are subject to change as new incentives become available.
Texas
Austin Energy provides rebates to businesses installing electric vehicle charging stations, offering up to $5,000 per station for eligible EV-dedicated Level 1, 2, and DC Fast chargers.
Entergy Texas' EV Charging Station Rebate Program provides financial incentives to residential and commercial customers for installing Level-2 Electric Vehicle Service Equipment and/or Direct Current Fast Charging Equipment, including $250 per plug for Level 2 EVSE, $750-$1,500 per plug for DC Fast Chargers, $250 for electric forklifts, and $150 for electric golf carts, to promote the adoption of electric vehicles.
Probity Tax Recovery can help you with claiming EV charging incentives. If you believe your business qualifies for these benefits or if you would like further information, please contact Probity Tax Recovery at our website or by contacting our consultants at 1-866-647-3920.