Instruction For Form Ct-40- Claim For Alternative Fuels Credit

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CT-40-I
New York State Department of Taxation and Finance
Instructions for Form CT-40
(8/99)
Claim for Alternative Fuels Credit
General information
fuels. The corporation pays an additional $2,000 to
have these components installed on the vehicle. The
Chapter 389 of the Laws of 1997 amended the Tax Law to provide
credit is computed on the entire $7,000
credits to taxpayers that purchase new electric or other alternative
($7,000 × .6 = $4,200 credit).
(clean-fuel) vehicles or convert gasoline or diesel-powered vehicles
to use electric or clean fuel. Investments in new clean-fuel refueling
For New York State purposes, the cost is not limited by the federal
property also qualify for credit.
expense limits of IRC section 179A(b)(1), and the credit may be
allowed for the entire cost even if some or all of the cost is
The credit applies to vehicles and refueling property that are
expensed under IRC section 179.
eligible for the federal electric vehicles credit under section 30 of
the Internal Revenue Code (IRC) or the clean-fuel deduction under
Example: A corporation incurs a total cost of $15,000 ($5,000
section 179A of the IRC.
per vehicle) to convert three diesel-powered vehicles to
alternative fuels use. Each vehicle weighs 20,000
The credits are available for vehicles and property placed in service
pounds. For federal tax purposes, the corporation
during tax years beginning after 1997 and before 2003. Any unused
elects to treat this entire cost as an expense under
credit may be carried forward indefinitely.
section 179 of the IRC. However, for New York State
Do not complete this form if the vehicles and property are
purposes, the credit is computed on the entire $15,000
disposed of or cease to qualify in the same year they are placed in
($5,000 × 3 = $15,000 × .6 = $9,000 credit).
service. No credit is available because the entire credit allowed
Clean-fuel vehicle refueling property
must be recaptured.
Fifty percent of the cost of qualified new clean-fuel vehicle
Eligibility
refueling property can be claimed as a credit. There is no credit
limit on qualified clean-fuel refueling property.
The following taxpayers are eligible to claim these credits:
To qualify for the credit, the property must be placed in service
General business corporations taxable under Article 9-A;
during the taxable year and used more than 50% of the time in a
Transportation and transmission corporations taxable under
trade or business located in New York State.
Article 9, sections 183 and 184;
For New York State purposes, the cost is not limited by the federal
Cooperative agricultural corporations taxable under Article 9,
expense limits of IRC section 179A(b)(2), and the credit may be
section 185; and,
allowed even if some or all of the cost is expensed under IRC
Certain utility corporations taxable under Article 9, section 186.
section 179.
Exception - Gas or electric corporations subject to the supervision
Definitions
of the Department of Public Service are not eligible for the credit
on electric vehicles.
Qualified electric vehicle is defined by reference to section 30(c)
of the IRC. It is a motor vehicle that is powered primarily by an
Credit amounts
electric motor drawing current from rechargeable batteries, fuel
Electric vehicles
cells, or other portable sources of electric current. Original use of
Fifty percent of the incremental cost of qualified new electric
the vehicle must commence with the taxpayer, and the vehicle must
vehicles can be claimed as a credit. The vehicle must be placed in
be acquired for use by the taxpayer, and not for resale.
service during the taxable year and must be registered in New York
State. The maximum credit is $5,000 per electric vehicle.
Incremental cost of an electric vehicle means the excess of the cost
of an electric vehicle over the cost of a gasoline-powered vehicle
Clean-fuel vehicle property
that is similar in size and style.
Sixty percent of the cost of qualified new clean-fuel vehicle
Motor vehicle means any vehicle that is manufactured primarily for
property can be claimed as a credit. The property must be installed
use on public streets, roads and highways, and that has at least four
in or manufactured as a part of a vehicle placed in service during
wheels. It does not include a vehicle operated exclusively on a rail
the taxable year and registered in New York State.
or rails.
The maximum credit is $5,000 for a vehicle with a gross vehicle
Clean fuel means natural gas, liquefied petroleum gas, hydrogen,
weight rating of 14,000 pounds or less, and $10,000 for all other
and electricity. It also means any other fuel that is at least 85%,
vehicles. In the case of a retrofit of an existing vehicle, the cost of
singly or in combination, methanol, ethanol, any other alcohol, or
the property includes the cost of installation.
ether.
Example:
A corporation pays $5,000 to purchase new
clean-fuel components to retrofit a 3,000 pound
gasoline-powered vehicle to operate on alternative

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