LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 8 SLS 21RS 82
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 8, 2021 5:39 PM Author: PEACOCK
Dept./Agy.: Revenue
Subject: Tax Credit for Conversion of Alternative Fuel Vehicles Analyst: Greg Albrecht
TAX/TAXATION EN +$478,000 GF RV See Note Page 1 of 1
Accelerates the sunset date for the tax credit for the conversion of alternative fuel vehicles. (7/1/21)
Current law provides a tax credit for a portion of the cost of qualifying clean-burning motor vehicle fuel property. For
purchases installed in a vehicle or the building of fueling stations after June 21, 2017, the credit is 30% of the cost. For
qualifying new vehicle purchases after June 26, 2017 the credit is the lesser of 10% of the cost or $2,500. For all purchases
of qualifying clean-burning motor vehicle fuel property after January 1, 2018, the credit is nonrefundable. The credit
terminates on January 1, 2022.
Proposed law terminates the credit for purchases of vehicles on July 1, 2021, six months earlier than current, and retains the
30% credit for the purchase or installation of qualified clean-burning motor vehicle fuel property (fueling stations, with
electricity added) until January 1, 2022.
Effective July 1, 2021.
EXPENDITURES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2021-22 2022-23 2023-24 2024-25 2025-26 5 -YEAR TOTAL
State Gen. Fd. $478,000 $0 $0 $0 $0 $478,000
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $478,000 $0 $0 $0 $0 $478,000
EXPENDITURE EXPLANATION
The Department of Revenue will incur small one-time costs of IT staff time to modify and test the tax return processing
system to incorporate the change in termination date of this credit.
REVENUE EXPLANATION
Vehicles: The credit is currently scheduled to expire after December 31, 2021, and would be allowed on the tax year 2021
returns for the last time, affecting FY22 net receipts. Credits affecting the last two completed fiscal years averaged $1.482
million; $1.376M FY19 and $1.588M FY20, primarily reflecting purchases in tax years 2018 and 2019. According to the Dept
of Revenue, only $207,000 of credit claim was for a fueling station on 2018 and 2019 corporate returns. Deducting that
amount from the two-year average above, leaves an average of $1.275 million that can be used as a likely baseline of
purchases in tax year 2021 and credit costs in FY22. Approximately one-half of those credit costs might expected to be
realized against FY22 net receipts with the termination provided by this bill, halfway through 2021, with a comparable net
revenue gain in FY22 attributable to purchases made in the second half of 2021 without benefit of the credit (or $638,000).
However, knowledge of the accelerated termination of the credit benefit may encourage accelerated purchases by individuals
and businesses to obtain the credit. A 25% discount to the potential credit savings is assumed to recognize this possibility.
The result is a one time increase in state net receipts for FY22 of $478,000 (and a one time additional loss to FY21 of
$163,000).
Fueling Stations: The bill allows the 30% tax credit for fueling station costs, including electricity, to stay effective for the
second half of 2021 (through December 31, 2021), until its scheduled termination in current law. According to the Dept of
Revenue, only $207,000 of credit claim was for a fueling station on 2018 and 2019 corporate returns. The difference in
termination dates between vehicles versus fueling stations suggests there are one or more fueling station projects in
progress that require additional time to complete in order to receive the available 30% tax credit in current law. If that is the
case, such projects would receive the credit under current law anyway, and that credit cost can not be attributed to this bill.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Christopher A. Keaton
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Legislative Fiscal Officer
or a Net Fee Decrease {S}


Statutes affected:
SB8 Original: 47:6035(I)
SB8 Engrossed:
SB8 Enrolled:
SB8 Act 385: