Green fuel tax credits proposed for government vehicles

State and local government fleets that use clean fuel and low-emission vehicles should receive federal tax credits, according to the municipal fleet association NAFA Fleet Management.

The organization is pushing a proposal it sent to the U.S. Senate Finance Committee and the House Ways and Means Committee that would allow government and other tax-exempt entities to take advantage of vehicle tax credits currently available to regular taxpayers who purchase clean fuel or low-emission vehicles.

“If adopted by the Congress, the tax credits will tip the lifecycle cost analysis to make it possible for government, public utilities and public universities to do the right thing for the environment and still be fiscally responsible,” said Phil Russo, NAFA executive director, CAE.

Under the proposal, a vehicle tax credit would be applied to an employer’s share of the entity’s federal payroll tax liability. In turn, the federal government would credit an equivalent amount from the general fund to the Social Security Trust Fund.

“If we are to achieve substantial penetration of clean fuel vehicles in the national fleet, it will require a combination of tax incentives that reach all consumers – the individuals, the private sector, and the public sector, including state and local governments,” said Russo.