Louisiana hopes to dodge $400 million bullet

A new proposed rule concerning Louisiana’s alternative fuel tax credit law would eliminate flex-fuel vehicles from eligibility, thereby reducing the state’s future exposure from an estimated $250 million a year to about $10 million, according to a fiscal impact statement. While the Revenue Department says less than 10% of eligible vehicle owners historically have claimed the credit, the statement notes the state’s exposure under the old rule could exceed $400 million, based on vehicles sold since 2009 (and another $30 million already has been paid or claimed). “Revenue insists that door is closed” by the new rule, says Greg Albrecht, the Legislature’s chief economist. William Potter, a CPA and director with Postlethwaite & Netterville, says he’s still not entirely clear on what the rule change would mean. “I personally think it’s a poorly drafted statute,” Potter says. “I also think the ruling Cynthia Bridges put out is a reasonable interpretation of the law.” The 2009 law promises a tax credit of 10% of the vehicle cost, up to $3,000. In April 2012, former Revenue Secretary Bridges issued a list of vehicles eligible for the credit, which included “flex-fuel” vehicles. Media reports stating Bridges’ ruling “expanded” the list of eligible vehicles are not accurate, as there was no list before April. When reporters discovered how expensive the obscure credit could become, Bridges resigned, and Gov. Bobby Jindal rescinded her ruling on a technicality in June. A public hearing on the new proposed new rule, which would go into affect Dec. 20, will be held at Revenue Department headquarters in Baton Rouge, 617 N. Third St., from 10 to 11 a.m. on Thursday, Oct. 25. —David Jacobs