Story originally printed in the Coulee News or online at www.couleenews.com
Published - Wednesday, June 13, 2007
Tax incentives are proposed for alternative fuel vehicles
In the past few months, legislators have introduced a flurry of proposals designed to promote alternative-fuel vehicles, including proposals that would provide income-tax credits for consumers buying hybrid, flexible fuel and electric vehicles.
Currently eight other states provide some sort of tax incentives for hybrid electric vehicles: Colorado, Connecticut, District of Columbia, Louisiana, New Mexico, Oregon, South Carolina and Washington.
In February, Rep. Michael Sheridan, R-Janesville, introduced AB85, which also provides for income and franchise tax credits equal to the amount of sales and use taxes a person pays on the purchase or lease of flexible-fuel vehicles for highway use capable of using both gasoline and E-85, a mixture of gasoline and at least 85 percent ethanol. The credit would be a maximum of $1,000 of the state sales tax and applied towards the first $20,000 of the purchase price.
The bill also provides for income and franchise tax credits for the purchase of E85 fuel. The amounts of fuel eligible for credit range from 100 gallons in 2007 to 500 gallons or more of E85 purchased in 2012.
Based on estimates of 117,703 of these type of FFVs registered in Wisconsin as of June 30, 2006, the state is estimating approximately 18,000 new FFVs will be sold in 2008 and would result in a loss of approximately $18 million revenue from income taxes in 2008.
In March, Rep. Joseph Parisi, D-Madison, introduced AB174 which would give income-tax credits for the amount of sales and use taxes paid for the purchase of hybrid motor vehicles that have a federal Environmental Protection Agency rating of no less than 40 miles per gallon or at least 15 percent greater mileage than the same models that are not hybrid motor vehicles.
This bill does not include leased vehicles for credit. The state has estimated it would lose $3.8 million in revenues from those income-tax credits in 2008.
A third bill (AB371) introduced May 29 by Rep. Sheryl Albers, R-Reedsburg, provides income- and franchise-tax credits for the purchase or lease of a motor vehicle that has a chemically fueled internal combustion engine capable of operating on gasoline, one or more alternative fuels or diesel fuel, or by means of a gas turbine, and is also equipped with an electric motor and energy storage device; a vehicle that qualifies as a neighborhood electric vehicle; a plug-in hybrid-electrical vehicle; an engine modification kit; and to businesses that purchase a sign advertising E85 fuel.
In an attempt to keep the revenue losses to the state down, this bill allows tax credits for purchase or lease only if the vehicle is manufactured in Wisconsin. So far, there has been no fiscal estimate for this bill, but it seems to be on the fast track as it is already before the Joint Finance Committee.
There is only one plant in Wisconsin that produces FFVs, in Janesville. There is a company in Reedsburg that produces neighborhood electric vehicles.
Consumers buying E85 vehicles face a dilemma with finding fuel. There are currently only 67 gas stations across the state providing E85 fuel and 1,200 across the country. There are two stations in the La Crosse area; Hansen’s IGA in West Salem and Kwik Trip at Oak Forest Road in Onalaska.
All stories copyright 2006 Coulee News and other attributed sources.