The Alternative Fuel Vehicle Refuelling Property Tax Credit was extended in December 2010 for one year, but was reduced to its original levels. The credit will now expire on December 31, 2011.

Fueling stations are now eligible to claim a 30% federal income tax credit for the cost of establishing alternative fueling infrastructure, including E85 and ethanol blender pumps. Other fuels eligible include natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, or biodiesel blends of at least B20.

The maximum tax credit is $30,000 for the cost of installing alternative fuel vehicle refueling property to be used in a trade or business of the taxpayer or installed at the principal residence of the taxpayer. The 30% credit is effective for property placed in service after December 31, 2010 and before January 1, 2012.

To claim the infrastructure tax credit, consult Internal Revenue Service (IRS) Form 8911, which may be found under the incentives tab under tax forms. Owners who install qualified refueling property on multiple sites may utilize the credit for each property; see IRS Form 8911 instructions for definitions of qualifying property and the value of the credit.

It is important to note that the AFV Refueling Property Credit is not a “refundable” credit. In other words, the IRS will not issue a check if the credit is greater than the amount the taxpayer owes. However, it is a transferable credit, so station owners can still receive the benefits of the credit by working with another business or individual that can take advantage of the credit.