A taxpayer may claim a non refundable tax credit of fifty percent of the incremental cost of a new vehicle minus any grant received, up to $3,000 per vehicle registered in Utah if:
- it is fueled by propane, natural gas, or electricity;
- it is fueled by another fuel determined by the Air Quality Board to be as effective as the above listed fuels; or,
- it meets the clean fuel vehicle standards in the Clean Air Act; and,
- a previous owner did not take the same credit.
(Incremental cost is the difference between the cost of a new clean fuel vehicle and the cost of the same model without the clean fuel system.)
Note: A hybrid vehicle does not qualify for the clean fuel vehicle credit for tax years beginning after 2005.
Claiming Qualifying Expenditures on the TC-40V Form
The amount you may claim is not the amount you paid for the vehicle. Rather, it is the difference between the cost of a new clean fuel vehicle and the cost of the same model without the clean fuel system. For example, say the CNG option cost $7,000 when the vehicle was new. That is the incremental cost. Half of that is $3,500. However, since the credit is capped at $3,000, you would receive a $3,000 tax credit in this example. Please consider the following examples:
- The CNG option for a 1998 Honda Civic was $4,500, so you could get a $2,250 tax credit.
- The CNG option for a 1998 Cavalier was $5,935, so you could get a $2,967 tax credit.
- The CNG option for a 2001 Chevy Cavalier was $5,935, so you could get a $2, 967 tax credit.
- The CNG option for a 2008 Honda Civic GX was $6,830, so you could get a $3,000 tax credit.
Determining Incremental Costs
To determine the increment cost, you will need to determine the cost of the CNG option for your vehicle. You will need to determine the amount yourself and feel comfortable with it in case you are ever audited by the Utah Tax Commission. There are a few ways you could go about finding this cost. You could obtain a window sticker or invoice from the car manufacturer, or your might want to research the cost online. The following are some Websites that might be helpful: