No one is a fan of raising taxes, whether it’s the gasoline tax or fees for alternative fuel vehicles, but we can no longer depend on the gasoline tax to fund our nation’s transportation needs. On one hand, this is a good thing; it means we’re decreasing our reliance on gasoline for vehicle fuel and increasing our nation’s energy security. On the other hand, the money has to come from somewhere—and it’s becoming increasingly clear that taxing drivers of alternative fuel and advanced technology vehicles is not the answer. Part of the allure of switching to alternative fuel or purchasing an electric vehicle is the promise of eventual cost-savings, and any move to tax these drivers is sure to be met with resistance.

The state of Virginia, for example, has legislation approaching ratification that would replace the gasoline tax of 17.5 cents per gallon with a 3.5 percent wholesale tax on motor fuels and a $64 annual fee on hybrid and alternative fuel vehicles (down from $100 as part of a compromise). While this was meant as a way for clean vehicle drivers to continue contributing to the state’s transportation fund, some criticize the so-called “hybrid tax” as detrimental to adoption of clean fuel vehicles, petitioning the legislature to eliminate the tax from the bill.

Other states struggling to address transportation funding in the new era of alternative fuel and fuel-efficient vehicles include Indiana, Maryland, and New Jersey. In Florida, a group is proposing to tax drivers for every mile they drive in order to make up for an estimated $74 billion shortfall in funding for necessary transportation projects. West Virginia is considering a similar program; however, Minnesota recently tried this and found the tracking technology lacking. Even the federal government is grappling with the question of how to increase funding for important transportation initiatives without raising taxes. However, as an article in Politico recently pointed out:

The most obvious, simple and straightforward solution would be to raise the 18.4-cents-per-gallon gasoline tax, which hasn’t budged since the last time it was raised in 1993. But that’s also the most politically difficult option. As a result, a gas tax increase has become the third rail of transportation policy, sending lawmakers of all political stripes — Democrats as well as Republicans — fleeing.

We are certain to see this issue played out on both the state and national level. Solutions will most likely be a matter of trial and error as part of the growing pains of collectively switching to domestic clean fuel. Luckily for drivers of vehicles that run on affordable American-made fuels like propane autogas, fuel cost savings are significant and, in many cases, immediate. While a $64 fee may negate any savings a driver of an electric-hybrid vehicle sees in a year, autogas vehicle drivers can save thousands annually on fuel costs alone.

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*All images courtesy of East Tennessee Clean Fuels Coalition.*

One tax credit allows clean fleets to recoup 50 cents per gge (gasoline gallon equivalent) specifically for the alternative fuels propane autogas (LPG), compressed natural gas (CNG) and liquid natural gas (LNG). The other provides a 30 percent credit on fueling infrastructure for any alternative fuel, on up to $30,000 per facility.

Though propane autogas is already affordable for fleets to implement without federal funding [see our recent post “America’s most cost-effective and practical clean fuel succeeds despite lack of government support”], this is still great news in terms of encouraging the use of domestic alternative fuel in the U.S. transportation sector. Fleets that have already made the transition to clean fuel will recoup enough money to add even more alt fuel vehicles over the next year. For fleet operators that have thought about converting to an alternative fuel but worried about the upfront cost, these tax credits may just be the extra incentive (pardon the pun) they need to take that first step toward greening their vehicles and saving on fuel costs in the long run.

If you’re a fleet operator considering making the switch to alternative fuel in 2013, we encourage you to do your research to decide on the most practical fuel for your fleet. The Alternative Fuel Fact Briefs available on the Autogas for America website provide a side-by-side comparison of propane autogas versus natural gas electric vehicles and gasoline, so you can see how each fuel stacks up in the areas of cost, emissions reduction and overall viability.

Here’s to a greener 2013 for American fleets—happy saving!