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Technology Assessment Division

Alternative Fuel Incentives and Laws

Alternative Fuels Tax Credit

The Louisiana Department of Revenue offers a tax credit for 50% of the cost of converting a vehicle to operated on an alternative fuel, 50% of the incremental cost of purchasing a new OEM alternative fuel vehicle, and 50% of the cost of alternative fuel equipment.  If the taxpayer is unable to determine the incremental cost, they may take a tax credit of the lesser of 10% of the vehicle cost or $3,000.

Louisiana Revised Statute 47:6035. Tax credit for conversion of vehicles to alternative fuel usage
R.S. 47:6035 provides for the Alternative Fuels Tax Credit provided by the Louisiana Department of Revenue

Annual Special Fuels Tax for LPG, CNG, and LNG

All vehicles that are licensed to drive on the public highways fuelled by Natural Gas, or Liquefied Petroleum Gas (Propane) must pay road use tax on an annual basis. The Excise Taxes Division of the Louisiana Department of Revenue has application forms available for a Special Fuels Decal that must be filled out, when a new vehicle is purchased and renewed annually.

Louisiana Revised Statute 47:802.3

Taxes on Other Alternative Fuels

There is no provision in the law for taxing electricity when used to fuel a vehicle.  Alternative fuels other than LPg, CNG, LNG, and electricity are taxed the same as gasoline and diesel.

Minimum Ethanol and Biodiesel Requirements

Within six months after monthly production of an alternate renewable fuel capable of substituting for ethanol and biodiesel produced in the state of Louisiana equals or exceeds an annualized production volume of twenty million gallons, two percent of the total motor fuel sold by volume in the state shall be the alternate renewable fuel produced from domestically grown feedstock but in no event shall such requirement exceed two percent of the total motor fuel sold by volume by owners or operators of fuel distribution terminals.

Louisiana Revised Statute 3:4674 Minimum ethanol and bio-diesel requirements

Purchase or Lease of Fleet Vehicles

Louisiana Revised Statute 39:364
The commissioner of administration shall not purchase or lease any motor vehicle for use by any state agency unless that vehicle is capable of and equipped for using bi-fuels, natural gas, or liquified petroleum gas.

However, the commission may waive this requirements if the vehicle will not have access to a refueling facility, the incremental cost cannot be recouped through reduced operating costs, or the vehicle does not meet the required specifications as determined by the division of administration