Internal Revenue Code:Sec. 179A. Deduction for clean-fuel vehicles and certain refueling property

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Contents


Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter B - Computation of Taxable Income
         PART VI - ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
       

Statute

    Sec. 179A. Deduction for clean-fuel vehicles and certain refueling
        property
 
    (a) Allowance of deduction
      (1) In general
        There shall be allowed as a deduction an amount equal to the
      cost of -
          (A) any qualified clean-fuel vehicle property, and
          (B) any qualified clean-fuel vehicle refueling property.
      The deduction under the preceding sentence with respect to any
      property shall be allowed for the taxable year in which such
      property is placed in service.
      (2) Incremental cost for certain vehicles
        If a vehicle may be propelled by both a clean-burning fuel and
      any other fuel, only the incremental cost of permitting the use
      of the clean-burning fuel shall be taken into account.
    (b) Limitations
      (1) Qualified clean-fuel vehicle property
        (A) In general
          The cost which may be taken into account under subsection
        (a)(1)(A) with respect to any motor vehicle shall not exceed -
            (i) in the case of a motor vehicle not described in clause
          (ii) or (iii), $2,000,
            (ii) in the case of any truck or van with a gross vehicle
          weight rating greater than 10,000 pounds but not greater than
          26,000 pounds, $5,000, or
            (iii) $50,000 in the case of -
              (I) a truck or van with a gross vehicle weight rating
            greater than 26,000 pounds, or
              (II) any bus which has a seating capacity of at least 20
            adults (not including the driver).
        (B) Phaseout.--In the case of any qualified clean-
                fuel vehicle property placed in service after December 
                31, 2005, the limit otherwise allowable under 
                subparagraph (A) shall be reduced by 75 percent.
       (2) Qualified clean-fuel vehicle refueling property
        (A) In general
          The aggregate cost which may be taken into account under
        subsection (a)(1)(B) with respect to qualified clean-fuel
        vehicle refueling property placed in service during the taxable
        year at a location shall not exceed the excess (if any) of -
            (i) $100,000, over
            (ii) the aggregate amount taken into account under
          subsection (a)(1)(B) by the taxpayer (or any related person
          or predecessor) with respect to property placed in service at
          such location for all preceding taxable years.
        (B) Related person
          For purposes of this paragraph, a person shall be treated as
        related to another person if such person bears a relationship
        to such other person described in section 267(b) or 707(b)(1).
        (C) Election
          If the limitation under subparagraph (A) applies for any
        taxable year, the taxpayer shall, on the return of tax for such
        taxable year, specify the items of property (and the portion of
        costs of such property) which are to be taken into account
        under subsection (a)(1)(B).
    (c) Qualified clean-fuel vehicle property defined
      For purposes of this section -
      (1) In general
        The term ''qualified clean-fuel vehicle property'' means
      property which is acquired for use by the taxpayer and not for
      resale, the original use of which commences with the taxpayer,
      with respect to which the environmental standards of paragraph
      (2) are met, and which is described in either of the following
      subparagraphs:
        (A) Retrofit parts and components
          Any property installed on a motor vehicle which is propelled
        by a fuel which is not a clean-burning fuel for purposes of
        permitting such vehicle to be propelled by a clean-burning fuel
        -
            (i) if the property is an engine (or modification thereof)
          which may use a clean-burning fuel, or
            (ii) to the extent the property is used in the storage or
          delivery to the engine of such fuel, or the exhaust of gases
          from combustion of such fuel.
        (B) Original equipment manufacturer's vehicles
          A motor vehicle produced by an original equipment
        manufacturer and designed so that the vehicle may be propelled
        by a clean-burning fuel, but only to the extent of the portion
        of the basis of such vehicle which is attributable to an engine
        which may use such fuel, to the storage or delivery to the
        engine of such fuel, or to the exhaust of gases from combustion
        of such fuel.
      (2) Environmental standards
        Property shall not be treated as qualified clean-fuel vehicle
      property unless -
          (A) the motor vehicle of which it is a part meets any
        applicable Federal or State emissions standards with respect to
        each fuel by which such vehicle is designed to be propelled, or
          (B) in the case of property described in paragraph (1)(A),
        such property meets applicable Federal and State
        emissions-related certification, testing, and warranty
        requirements.
      (3) Exception for qualified electric vehicles
        The term ''qualified clean-fuel vehicle property'' does not
      include any qualified electric vehicle (as defined in section
      30(c)).
    (d) Qualified clean-fuel vehicle refueling property defined
      For purposes of this section, the term ''qualified clean-fuel
    vehicle refueling property'' means any property (not including a
    building and its structural components) if -
        (1) such property is of a character subject to the allowance
      for depreciation,
        (2) the original use of such property begins with the taxpayer,
      and
        (3) such property is -
          (A) for the storage or dispensing of a clean-burning fuel
        into the fuel tank of a motor vehicle propelled by such fuel,
        but only if the storage or dispensing of the fuel is at the
        point where such fuel is delivered into the fuel tank of the
        motor vehicle, or
          (B) for the recharging of motor vehicles propelled by
        electricity, but only if the property is located at the point
        where the motor vehicles are recharged.
    (e) Other definitions and special rules
      For purposes of this section -
      (1) Clean-burning fuel
        The term ''clean-burning fuel'' means -
          (A) natural gas,
          (B) liquefied natural gas,
          (C) liquefied petroleum gas,
          (D) hydrogen,
          (E) electricity, and
          (F) any other fuel at least 85 percent of which is 1 or more
        of the following: methanol, ethanol, any other alcohol, or
        ether.
      (2) Motor vehicle
        The term ''motor vehicle'' means any vehicle which is
      manufactured primarily for use on public streets, roads, and
      highways (not including a vehicle operated exclusively on a rail
      or rails) and which has at least 4 wheels.
      (3) Cost of retrofit parts includes cost of installation
        The cost of any qualified clean-fuel vehicle property referred
      to in subsection (c)(1)(A) shall include the cost of the original
      installation of such property.
      (4) Recapture
        The Secretary shall, by regulations, provide for recapturing
      the benefit of any deduction allowable under subsection (a) with
      respect to any property which ceases to be property eligible for
      such deduction.
      (5) Property used outside United States, etc., not qualified
        No deduction shall be allowed under subsection (a) with respect
      to any property referred to in section 50(b) or with respect to
      the portion of the cost of any property taken into account under
      section 179.
      (6) Basis reduction
        (A) In general
          For purposes of this title, the basis of any property shall
        be reduced by the portion of the cost of such property taken
        into account under subsection (a).
        (B) Ordinary income recapture
          For purposes of section 1245, the amount of the deduction
        allowable under subsection (a) with respect to any property
        which is of a character subject to the allowance for
        depreciation shall be treated as a deduction allowed for
        depreciation under section 167.
    (f) Termination
      This section shall not apply to any property placed in service
    after December 31, 2005.
 

Sources

    (Added Pub. L. 102-486, title XIX, Sec. 1913(a)(1), Oct. 24, 1992,
    106 Stat. 3016; amended Pub. L. 104-188, title I, Sec. 1704(j)(2),
    Aug. 20, 1996, 110 Stat. 1881.)
 

Miscellaneous

                                 AMENDMENTS
      2005 - Energy Policy Act of 2005, Sec. 1348, amended
     Sec.179A(f)amended by striking `December 31, 2006' and
     inserting `December 31, 2005'.
      2004 - Subsec.319,Pub.L.108-311, amended Sec.179A(b)(1)(B)
    by adding a new paragraph (B).
      2002 - Subsec. 606(a)(1)and (2), Pub. L. 107-147, amended Sec 179A
    (b)(1)(B)by substituting 2003 for 2001 and in (i), (ii), and (iii) 
    changing 2002, 2003, and 2004 to 2004, 2005, and 2006, respectively.
    Sec. 179A(f) is changed to 2006 from 2004.  This amendment is 
    effective for property placed in service after Dec. 31, 2001.
      1996 - Subsecs. (f), (g). Pub. L. 104-188 redesignated subsec.
    (g) as (f).
                     EFFECTIVE DATE OF 2004 AMENDMENTS
      Pub.L.108-311,Sec.319, Effective Date:--The amendment made 
by this section shall apply to property placed in service after 
December 31, 2003.

                               EFFECTIVE DATE
      Section applicable to property placed in service after June 30,
    1993, see section 1913(c) of Pub. L. 102-486, set out as a note
    under section 30 of this title.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 62, 263, 280F, 312, 1016,
    1245, 4001 of this title.
 

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