To encourage individuals and businesses to reduce vehicle-related air pollution, Utah offers a nonrefundable tax credit for qualified new vehicles or for the conversion of vehicles or engines that use clean burning fuels. The credit may only be taken once per vehicle and must be claimed in the taxable year the vehicle or engine is purchased or converted. If the credit was taken by a previous owner, the current owner is not eligible to take the credit.
This credit may only be applied against current Utah income tax due; any tax credit in excess of tax due will not be refunded. However, the credit in excess of the current tax liability may be carried over to the next five years and used against subsequent tax liabilities until used up.
A credit is allowed for the purchase of a new vehicle that is fueled by propane, natural gas, electricity, or a fuel determined by the Air Quality Board to be as effective as these other fuels. Also, vehicles that meet the clean fuel vehicle standards in the Clean Air Act are qualified for the credit.
The credit is equal to 50 percent of the incremental cost (the additional cost paid over a vehicle without the clean fuel system), up to a maximum credit of $3,000. Any clean fuel grant received must reduce the incremental cost before the calculation of the credit.
Note: An electric-hybrid vehicle does not qualify for this credit.
A credit is allowed for the purchase of equipment that converts a vehicle to run on propane, natural gas, electricity, or a fuel determined by the Air Quality Board to be as effective as these other fuels. Also, converted vehicles that meet the clean fuel vehicle standards in the Clean Air Act are qualified for the credit.
The credit is equal to 50 percent of the cost of the equipment to convert the vehicle, up to a maximum credit of $2,500. Any clean fuel grant received must reduce the incremental cost before the calculation of the credit.
A credit is allowed for the purchase of equipment that converts a special mobile equipment engine to run on propane, compressed natural gas, electricity, or a fuel determined by the Air Quality Board to be as effective as these other fuels. Also, if the conversion equipment makes the engine substantially more effective in reducing air pollution than the fuel for which the engine was originally designed, it would qualify for the credit.
The credit is equal to 50 percent of the cost of the equipment to convert the engine, up to a maximum credit of $1,000. Any clean fuel grant received must reduce the incremental cost before the calculation of the credit.
To claim this credit, complete form TC-40V, Clean Fuel Vehicle Tax Credit, which must be certified by the Department of Environmental Quality’s Division of Air Quality, verifying the credit has been approved. Do not submit this form with your tax return; keep it with your tax records.
Division of Air Quality
150 North 1950 West
Salt Lake City, UT 84116
Telephone 801-536-4000
Fax 801-536-0085
http://airquality.utah.gov/Planning/Mobile/Clean_Fuel_Tax_Credit.htm
