Tax Type
Individual Income Tax
Description
Clean-fuel vehicles and clean-fuel vehicle property; Cumulative application of credit
Topic
Credits
Date Issued
05-23-1997
May 23, 1997
Re: Request for Ruling: Corporate and Individual Income Tax
Tax Credit for Clean-Fuel Vehicles and Certain Refueling Property
Dear******************
This will reply to your letter of May 13, 1997, in which you request a ruling concerning the tax credit for clean-fuel vehicles, certain refueling property, and qualified electric vehicles.
FACTS
You have indicated that Code of Virginia § 58.1-438.1, as written, may be construed to limit a taxpayer to claiming the credit for either clean-fuel vehicles, certain refueling property, or qualified electric vehicles in any particular taxable year. You believe the Virginia credit should apply to the purchase of these items collectively instead of requiring that the Virginia credit be claimed for one of these items to the exclusion of the others. You are requesting a ruling from the department on this issue.
RULING
Code of Virginia § 58.1-438.1 provides that:
-
- Any corporation, individual or public service corporation shall be allowed a credit against the income or gross receipts taxes . . . of an amount equal to ten percent of the deduction allowed to such corporation, individual or public service corporation under Section 179A of the Internal Revenue Code for purchases of clean-fuel vehicles principally garaged in Virginia or certain refueling property placed in service in Virginia or ten percent of the costs used to compute the credit under Section 30 of the Internal Revenue Code.
This statute is intended to provide a credit for 10% of any deductions allowed under to § 179A of the Internal Revenue Code (IRC) for the purchase of both clean-fuel vehicles and certain refueling property. The Joint Subcommittee Studying the Use of Vehicles Powered by Clean Transportation Fuel, in its final report to the General Assembly in 1996 (House Document No. 47), confirms the original intent of the statute by indicating that House Bill 1727 for 1993 granted the Virginia credit for clean-fuel vehicles and certain refueling property.
In 1994, House Bill 97 amended this statute to provide an additional credit for 10% of the cost of qualified electric vehicles used to compute the federal credit under § 30 of the IRC. There was nothing in the amended legislation to be construed to limit the credit to a particular vehicle or property. The department, therefore, concludes that a taxpayer is allowed to claim a cumulative Virginia credit based on the purchase of clean-fuel vehicles, certain refueling property, and qualified electric vehicles.
I trust that your concerns have been addressed. If further assistance is needed, please contact *********at ******* .
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12540N
Rulings of the Tax Commissioner