New York Tax Incentives

Alternative Fuel Tax Exemption and Rate Reduction

E85, compressed natural gas, and hydrogen used exclusively to operate the engine of a motor vehicle is exempt from state sales and use taxes. Additionally, cities and counties are authorized to reduce the sales and use tax imposed on B20 to 85% of the diesel fuel tax rate. This exemption and rate reduction expires September 1, 2011. (Reference New York Tax Law 1111 and 1115)

Alternative Fueling Infrastructure Tax Credit

A state tax credit is available for the installation of clean fuel vehicle fueling infrastructure located in the state. The tax credit is equal to 50% of the cost of the infrastructure. This includes infrastructure for storing or dispensing a clean-burning fuel into the fuel tank of a motor vehicle powered by that fuel, as well as infrastructure used for recharging electric vehicles. Eligible clean fuels include natural gas, liquefied petroleum gas, hydrogen, electricity, and any other fuel that is a least 85% ethanol or other alcohol. This credit does not apply after December 31, 2010. (Reference New York Tax Law Section 187-b)

Biofuel Production Tax Credit

Biofuel producers in New York State are eligible for a state tax credit of up to $0.15 per gallon of biodiesel (B100) or ethanol produced after the production facility has produced and made available for sale 40,000 gallons of biofuel per year. The credit is capped at $2.5 million per taxpayer per taxable year, and available for no more than four consecutive taxable years per production facility. (Reference New York Tax Law 28)