710:50-15-81 Credit for qualified clean-burning motor vehicle fuel property

(a) Definitions. The following words and terms, when used in this Section, shall have the following meaning, unless the context clearly indicates otherwise: (1) " Motor vehicle " means a motor vehicle originally designed by the manufacturer to operate lawfully and principally on streets and highways . [ See: 68 O.S. § 2357.22(C)] "Vehicle" shall not mean conveyor belts, forklifts, riding mowers, tractors, or other similar items. (2) " Qualified clean-burning motor vehicle fuel property " means as defined in Section 2357.22(B) of Title 68 of the Oklahoma Statutes. (b) General provisions. For tax years 2028 and before, there shall be allowed a one-time nonrefundable income tax credit for investments in qualified clean-burning motor vehicle fuel property placed in service on or after January 1, 1991, or with respect to a hydrogen fuel cell, on or after July 1, 2023. Property on which the credit has previously been claimed is ineligible for the credit. (c) Leased property and equipment. An entity that converts property to qualified clean‑burning motor vehicle fuel property may lease such property and retain the right to claim the credit. An entity that invests in and owns equipment that qualifies as qualified clean-burning motor vehicle fuel property may claim the credit even if a different entity owns the remainder of the motor vehicle property and leases the conversion equipment from the owner of the equipment. As used herein, a "different entity" includes, but is not limited to, the United States government, the State of Oklahoma, and any political subdivision of this state. (d) Amount of credit . (1) Motor vehicle credit. (A) For the qualified clean-burning motor vehicle fuel property defined in 68 O.S. § 2357.22 (B)(1), (2) or (5), the maximum amount of the credit shall be as follows based upon gross vehicle weight of the qualified vehicle: (i) For vehicles up to or below 6,000 pounds, the credit shall be a maximum amount of $5,500; (ii) For vehicles between 6,001 pounds to 10,000 pounds, the credit shall be a maximum amount of $9,000; (iii) For vehicles of 10,001 pounds, but not in excess of 26,500 pounds, the credit shall be a maximum amount of $26,000; and (iv) For vehicles equal to or in excess of 26,501 pounds, the credit shall be a maximum amount of $100,000. (B) For qualified clean-burning motor vehicle fuel property defined in 68 O.S. § 2357.22(B)(1), the amount of the credit is limited to the lesser of the cost of the conversion equipment installed, which includes parts and installation service, or the amount in subparagraph (A) of this paragraph. (C) For qualified clean-burning motor vehicle fuel property defined in 68 O.S. § 2357.22(B)(2) and (5), the amount of the credit is: (i) Limited to the lesser of the portion of the basis of the motor vehicle that is attributable to the storage of such fuel, the delivery to the engine of such fuel, and the exhaust of gases from combustion of such fuel, or the amount in subparagraph (A) of this paragraph; or (ii) The lesser of 10% of the cost of the motor vehicle or $1,500. (2) Infrastructure credit. (A) For qualified clean-burning motor vehicle fuel property defined in 68 O.S. § 2357.22(B)(3), a per-location credit of 45% of the cost of the qualified clean-burning motor vehicle fuel property. (B) For qualified clean-burning motor vehicle fuel property defined in 68 O.S. § 2357.22(B)(4), a per-location credit of the lesser of 50% of the cost of the qualified clean-burning motor vehicle fuel property or $2,500. (e) Carryforward. Any credit claimed, but not used, may be carried over, in order, to each of the five (5) subsequent taxable years. (f) Limitations of eligibility. No qualified establishment, nor its contractors or subcontractors, that has received or is receiving an incentive payment pursuant to Section 3601 et seq. of the Oklahoma Statutes, (Oklahoma Quality Jobs Program Act), or Section 3901 et seq. of the Oklahoma Statutes, (Small Employer Quality Jobs Incentive Act), shall be eligible to receive the credit for qualified clean-burning motor vehicle fuel property provided by 68 O.S. § 2357.22, in connection with the activity and establishment for which incentive payments have been or are being received. [ See: 68 O.S. §§ 3607, 3909] (g) Sunset date. This credit will only be available through tax years beginning before December 31, 2028. (h) Tax credit limitation. (1) For tax years 2020 through 2022, the total amount of credits used to offset tax shall be adjusted annually to limit the annual amount of credits to $20,000,000. (2) For tax years 2023 through 2028, the total amount of credits used to offset tax shall be adjusted annually to limit the annual amount of credits to: (A) $10,000,000 for qualified clean burning fuel property propelled by compressed natural gas, liquefied natural gas, or liquefied petroleum gas, property related to the delivery of compressed natural gas, liquefied natural gas or liquefied petroleum gas, and property directly related to the compression and delivery of natural gas; (B) $10,000,000 for property originally equipped so that the vehicle may be propelled by a hydrogen fuel cell electric fueling system and property directly related to the delivery of hydrogen; and (C) $10,000,000 for property which is a metered-for-fee, public access recharging system for motor vehicles propelled in whole or in part by electricity. (D) Beginning with tax year 2024, if one of the tax credit pools listed in paragraph (2) of this subsection is not fully utilized for the applicable tax year, the remaining balance of that pool shall be allocated to each of the two remaining tax credit pools in equal amounts. If two of the tax credit pools listed in paragraph (2) are not fully utilized for the applicable tax year, the remaining balances in both pools shall be added together and the sum of those amounts shall be allocated to the remaining tax credit pool. (3) The Tax Commission shall annually calculate and publish by the first day of the affected taxable year a percentage by which the credits shall be reduced so the total amount of credits used to offset tax does not exceed each of the limits provided in subsection (h). Provided, no credit shall be reduced unless the total amount of credits used to offset tax exceeds $30,000,000. (A) If the total amount of credits used to offset tax from all three tax credit pools exceeds $30,000,000 and the remaining balance of one pool is allocated to the remaining tax credit pools, the Tax Commission shall calculate the percentage adjustments as follows: (i) There shall be no percentage adjustment for the tax credit pool from which the remaining balance was allocated to the other two pools. (ii) The formula to be used for the other two pools shall be $10,000,000 plus the amount allocated from the other pool divided by the credits claimed in the second preceding year from the respective pool. (iii) For example, assume that $4,000,000 from Pool C is allocated in equal amounts to Pool A and Pool B: (I) For Pool A, $12,000,000 shall be divided by the credits claimed in the second preceding year from Pool A. (II) For Pool B, $12,000,000 shall be divided by the credits claimed in the second preceding year from Pool B. (III) As the credits claimed from Pool C did not exceed $10,000,000, no calculation formula is needed. (B) If the total amount of credits used to offset tax from all three tax credit pools exceeds $30,000,000 and the remaining balances of two pools are allocated to the remaining tax credit pool, the Tax Commission shall calculate the percentage adjustments as follows: (i) There shall be no percentage adjustment for the two tax credit pools from which the remaining balances were allocated to the remaining pool. (ii) The formula to be used for the remaining pool shall be $10,000,000 plus the amount allocated from the other pools divided by the credits claimed in the second preceding year from the remaining pool. (iii) For example, assume that $4,000,000 from Pool B and $4,000,000 from Pool C are allocated to Pool A: (I) For Pool A, $18,000,000 shall be divided by the credits claimed in the second preceding year from Pool A. (II) As the credits claimed from Pool B did not exceed $10,000,000, no calculation formula is needed. (III) As the credits claimed from Pool C did not exceed $10,000,000, no calculation formula is needed. (C) If the total amount of credits used to offset tax from all three tax credit pools exceeds $30,000,000 and the amount of credits used to offset tax in each individual pool exceeds $10,000,000, the Tax Commission shall calculate the percentage adjustments as follows: (i) For Pool A, $10,000,000 shall be divided by the credits claimed in the second preceding year from Pool A. (ii) For Pool B, $10,000,000 shall be divided by the credits claimed in the second preceding year from Pool B. (iii) For Pool C, $10,000,000 shall be divided by the credits claimed in the second preceding year from Pool C.