From charging incentives to government rebates, businesses investing in essential electric vehicle infrastructure are already reaping several financial benefits. In certain situations, these advantages repeat annually during tax season.
Alternative fuel tax credits can help your business save money while also preparing for the future. To fully capitalize on these credits, however, you need to understand what they are and how they apply to your operations.
Regardless of whether your business operates in the U.S. or Canada, it's crucial to take advantage of every incentive available. Here's how to determine which alternative fuel tax credits are within reach and whether your business qualifies.
To maximize your tax benefits, the first step is identifying which incentives you're eligible for. When you hear the term "alternative fuel," you might immediately think of electric vehicles. However, that's just one of the 12 power sources recognized by both U.S. and Canadian governments as alternative fuels. Others include:
- **Biodiesel and renewable diesel:** These fuels can be produced from vegetable oils, animal fats, or even recycled cooking grease, while renewable diesel is derived from biomass.
- **Hydrogen:** Although not yet widely commercialized, hydrogen-powered vehicles could potentially offer an emissions-free alternative in the future.
- **Natural gas:** Abundant and often cheaper than conventional gasoline or diesel, natural gas presents a compelling option for businesses.
- **Ethanol:** Made from corn and other plant materials, ethanol is frequently mixed with gasoline for use in vehicles.
It’s worth noting that electric vehicles currently dominate the market share of alternative fuel vehicles on the road. While there are technically numerous alternative fuels that might qualify for tax credits, the current environment particularly favors businesses involved in electric vehicles and their associated infrastructure, such as charging stations.
The type of business you run also plays a key role when it comes to claiming tax incentives. For instance, the Alternative Fuel Infrastructure Tax Credit (AFITC) applies to those who install EV chargers and other alternative refueling stations, including multi-family buildings, hotels, and commercial parking lots. In these cases, the type of alternative fuel is less important than the infrastructure itself.
For examples of alternative fuel tax credits, staying updated on various state, provincial, and federal-level incentives is vital. This helps you identify which credits you already qualify for and allows you to plan future expansions. For example, if you know you'll receive 30% of the depreciable costs back under the AFITC, you can budget accordingly for business growth.
In 2023, over 70% of the U.S. was covered by EV charger rebates or incentives. If your business focuses on making electric vehicles more accessible, ChargeLab’s Rebate Finder tool can help pinpoint incentives tailored specifically to your business and location. Simply input your zip code and answer a few questions about the types and locations of the chargers you're installing.
In Canada, the government proposed five new investment tax credits in 2023 to promote clean energy adoption. If approved, these proposals would make Canadian business owners eligible for tax refunds on their alternative fuel infrastructure investments.
Many other incentives exist across Canada, varying by province. For instance, municipalities in Alberta can receive up to $5,000 per Level 2 charger or $75,000 per direct-current fast charger (DCFC, also called Level 3 charger) through the MCCAC Electric Vehicle Charging Program.
Combining tax credits with rebates can maximize your savings. Typically, tax credits appear as refunds after the tax cycle concludes, meaning you cover upfront costs and recoup them later. However, alternative fuel tax credits are just one way to benefit financially. By pairing tax credits with other incentives, you might receive some funds upfront and more during tax season.
Consider these types of rebates:
- **Prescriptive rebates:** These provide businesses with a fixed amount per unit, often targeting specific charger types and features.
- **Point-of-purchase rebates:** More common for residential projects, these rebates are often offered by EV manufacturers or third-party suppliers.
- **Make-ready rebates:** Focused on Level 3 chargers, which are more expensive to install, these rebates can offset construction and electrical work costs and usually require prior submission of plans.
- **Turnkey rebates:** These cover everything from materials to installation, often used by installers.
- **Case-by-case rebates:** Other rebates, grants, and promotions with varying criteria can help your business save money on EV installation projects.
As the world shifts toward greater use of alternative fuel sources, it’s likely more legislation will emerge to offer further benefits to business owners. Discuss all potential tax credits with your accountant or tax handler, and regularly check government websites for updates on rebates.
The future is electric. Over 4.1 million plug-in hybrid and battery electric vehicles were sold in the U.S. between 2010 and 2023, a number that continues to grow. As EVs become more affordable, the demand for charging infrastructure is rising. Our data shows that 60% of EV drivers use public chargers despite having home charging options.
This presents an opportunity for savvy business owners to tap into this expanding market while saving money through alternative fuel tax credits. Installing EV chargers isn't just about hardware; software is equally important. That's where ChargeLab comes in.
Our backend software powers North America's leading EV charger manufacturers, turnkey installers, and network operators. As the only true operating system for EV chargers, our platform turns any OCPP device into a smart charger, simplifying your business operations. Want to learn more? Reach out to the ChargeLab team today.
Limited time offer: Earn $1,000+ in bonuses as a ChargeLab reseller. We cut you a check for $500 when you deploy two ports. Refer your friends to this program and get $500 for each one that deploys 2 or more ports.
Gantry Machining Center,Cnc Gantry Milling Machine,Gantry Milling Machine,Cnc Gantry Milling
Suzhou Loong Won Machinery Technology Co., Ltd. , https://www.loongwon.com