Which hybrid-vehicle equipment costs qualified for Louisiana's former clean-burning motor-vehicle fuel-property credit?

Plain-English summary

The historical credit treated a post-purchase conversion differently from a manufacturer-built hybrid.

Equipment used to convert a gasoline-powered vehicle into a hybrid qualified. Equipment used to convert a diesel-powered vehicle did not. But when a manufacturer originally built the hybrid, qualifying equipment costs counted whether the conventional engine used gasoline or diesel.

Costs addressed by the ruling

The statutes described three cost categories: vehicle-conversion costs, manufacturer-installed hybrid equipment, and property used directly and exclusively to deliver alternative fuel into a vehicle's tank.

This ruling addressed only the first two categories. It did not analyze alternative-fuel delivery property.

Conversion versus original manufacture

For an existing vehicle converted into a hybrid, the Department limited qualifying equipment to a gasoline-powered starting vehicle. A diesel conversion did not qualify under the ruling.

For a hybrid built by the manufacturer, the statute did not impose that gasoline-only limitation. The credit was computed on qualifying equipment originally installed in either a gasoline-engine or diesel-engine hybrid.

Common questions

Q: Did every hybrid conversion qualify?

A: No. Under this ruling, converting a gasoline vehicle qualified, while converting a diesel vehicle did not.

Q: Did a manufacturer-built diesel hybrid qualify?

A: Yes, as to the cost of its qualifying originally installed equipment.

Q: Did the ruling decide the treatment of alternative-fuel delivery equipment?

A: No. It expressly limited its analysis to conversion and manufacturer-installed equipment costs.

Citations and references

• La. R.S. 47:38 — individual-side clean-burning motor-vehicle fuel-property credit cited in the ruling
• La. R.S. 47:287.757 — corporation-side credit cited in the ruling
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 02-019

Original ruling text

Revenue Ruling
No. 02-019
November 8, 2002
Fiduciary Income Tax, Individual Income Tax, and Corporation Income Tax
Credit for Converting Vehicles to Alternative Fuel Usage

Purpose: The purpose of this Revenue Ruling is to clarify whether hybrid motor vehicles qualify
for the credit for converting vehicles to alternative fuel usage.
Analysis/Discussion: A hybrid vehicle is one that combines a conventional fuel powered engine
with an alternate fuel motor. A combining of the two creates greater fuel efficiency and produces
fewer emissions than vehicles powered solely by a conventional fuel powered engine. The
conventional fuel used in hybrids in the context of this ruling is either gasoline or diesel fuel.
In 1991, La. Rev. Stat. Ann. §§ 47:38 and 47:287.757 were enacted to provide an incentive to
individuals and corporations who invest in qualified clean-burning motor vehicle fuel property. There
are three categories of cost that are eligible for the credit:
• Cost related to the converting of certain vehicles to hybrid vehicles,
• Cost related to the manufacture of a hybrid vehicle, and
• Cost of the property that is directly and exclusively related to the delivery of an alternative
fuel into the fuel tank of a vehicle.
This revenue ruling is only relevant in computing the credit using the cost in the first two categories.
In the first category, the cost of equipment installed in converting a motor vehicle that uses gasoline
into a hybrid vehicle is eligible for the credit. The credit does not apply to the cost to convert vehicles
that were diesel fuel powered.
In the second category, the cost of qualifying equipment installed by a manufacturer of hybrid
vehicles is allowed in computing the credit. The cost used here is not limited in the statute to only
hybrids that use gasoline powered engines. This allows the credit to be available on those hybrids
that also use diesel fuel powered engines.
Conclusion: The cost of the equipment involved in converting to a hybrid vehicle or installed by a
manufacturer of hybrid vehicles can be used to compute this credit. In the area of conversion of
vehicles into hybrids, the cost of the equipment to convert those that were gasoline powered qualifies
for the credit, but not the costs to convert those that were diesel powered. For vehicles built as

Revenue Ruling No. 02-019
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hybrids by a manufacturer, it makes no difference as to the conventional fuel (gasoline or diesel)
used. The credit is on the cost of the qualifying equipment originally installed on the hybrid vehicle.

Cynthia Bridges
Secretary
By:

Marcus Gaudet
Tax Research Analyst
Policy Services Division

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue
employees. It is issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply
principles of law to a specific set of facts. A Revenue Ruling does not have the force and effect of law
and is not binding on the public. It is a statement of the department's position and is binding on the
department until superseded or modified by a subsequent change in statute, regulation, declaratory
ruling, or court decision.