New vehicle tax break regulations take effect this week

Gov. Bobby Jindal’s administration is moving ahead with new regulations that spell out limits for the state’s alternative fuel vehicle tax credit. The final rule governing the tax credit program is being published today and will take effect this week. The alternative fuel vehicle tax break’s cost has grown much larger than estimated and become a headache for the Jindal administration because of differing interpretations about eligibility. The new regulations will definitively eliminate “flex-fuel” cars and trucks—which can burn ethanol but also use gasoline—from qualifying for the credit. Including flex-fuel vehicles could have cost the state an estimated $240 million a year. The program gives buyers a credit of 10% of the cost of an eligible vehicle, or $3,000, whichever is less. Read a recent Daily Report story for more analysis on the tax credit here.