Businesses that use forklifts powered by propane autogas and propane can now claim a tax credit for $.50 for every gallon of the alternative fuel they used during 2015.
The Internal Revenue Service announced the alternative fuel tax credit in a guidance released this month. The move comes after Congress passed a new law authorizing a number of new tax breaks for businesses.
New Law Passed
The Protecting Americans from Tax Hikes (PATH) Act of 2015 retroactively extends the alternative fuel tax credit for forklift operators. The law actually approves the same tax credit for 2016 as well, but the IRS has not yet officially published its guidance on how the credit may be claimed for the current year.
The law actually approves the same tax credit for 2016 as well, but the IRS has not yet officially published its guidance on how the credit may be claimed for the current year.
IRS Redefines ‘Forklift’
In the 2015 guidance, the IRS redefined forklifts as “off-highway business motor vehicle(s)”, which made them eligible for the alternative fuel tax credit currently being offered to on-road vehicle burning alternative fuels. The federal taxing agency said the end-user of the propane autogas fuel is the entity that should receive the tax credit.
Claims for 2015 must be filed with the IRS by Aug. 8 of this year.
Check with Tax Advisers First
The Propane Education and Research Council recommended that forklift owners seeking to file a claim to receive the credit consult their own tax advisors first before seeking any credits or refunds under the new law.
Roy Willis, the council’s president and CEO, said the tax credit is the financial incentive for forklift owners need when considering a switch to cleaner alternative fuels.
“For fleet managers, propane autogas vehicles offer the lowest cost of ownership,” Willis said in a news release. “And one way to maximize the financial benefit of propane autogas is by taking advantage of this alternative fuel tax credit from the federal government.”
Tax Break and Fuel Efficiency
In addition to saving money with the new tax credit, forklifts that are powered by propane also provide businesses with more productivity, he said.
“Propane forklifts are already proven to be a solution for facilities with multiple shifts and round the clock operation where downtime isn’t an option,” Willis said. “The federal tax credit simply makes propane forklifts more cost effective than they already are.”
Other Benefits to Propane
Besides the new tax break, powering forklifts with propane offers other benefits:
- Easy Refueling — With propane, you don’t need to wait for batteries to recharge or handle dangerous liquids like gasoline. Instead, you simply pop the empty tank off, attach a fresh full tank, and off you go.
- Lower Gas Prices — According to CleanFUEL USA, a gallon of propane costs about $.40 less per gallon than gasoline. The average price of propane is $2.92, compared to $.306 per gallon for diesel fuel.
- Better Performance — Propane generates better horsepower and torque than electric-powered forklifts.
- Indoor Use — While propane isn’t as emission-free as electric forklifts, it is considered clean enough for indoor use and is safer to use than many other gasses.