NAFA Applauds The Extension Of The Alternative Fuels Excise Tax

While the biggest news came from preventing the country from going over the "fiscal cliff", the U.S. government also played a significant role in the direction of fleet vehicles for the near future with the bill signed into law on January 1. That bill contained the Extension of Alternative Fuels Excise Tax, an incentive that helps justify the use of biodiesel and alternative fuel vehicles for thousands of fleets. The extension continues a $1.00 per gallon tax credit for biodiesel and a $0.50 per gallon alternative fuel tax credit for natural gas and propane throughout 2013. In addition, the bill retroactively covers fuels produced in 2012 after the tax credit had expired.

NAFA Fleet Management Association applauds the continuation of the tax credit. "This tax credit is very important to fleet managers, who have typically been the early adopters of alternative fuels," explains NAFA Executive Director, Phillip E. Russo, CAE. "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.

"Thanks to these credits back in place, fleet managers are now able to finalize their vehicle acquisitions and project fuel costs for the coming year," added Russo.

The $1-per-gallon biodiesel tax incentive was first implemented in 2005. Congress allowed it to lapse in 2010 and again in 2012. The biodiesel credit is reflected in the price a fleet pays for fuel, and thus is a significant factor in projecting fuel costs. However, without the tax incentive, biodiesel is significantly more expensive than conventional diesel fuel – making it more difficult to make the business case for biodiesel. Furthermore, the incentives for propane and natural gas help to offset the higher acquisition cost of alternative fuel vehicles and help to ensure the long-term demand and commercial viability of alternative fuel technologies.

This effort continued NAFA’s ongoing mission to look after the interests of fleet managers in the legislative arena. The Association retains legal counsel in both Washington, DC and Ottawa, Canada to fight for the rights of the industry. NAFA not only strives to keep Members informed about legislative issues that could affect them, but the Association’s legislative team regularly offers the "fleet perspective" on proposed changes and makes sure government agencies keep fleets in mind before making final decisions.

NAFA Fleet Management Association
125 Village Blvd., Suite 200
Princeton, NJ 08540

Telephone: 609.720.0882 Fax: 609.452.8004