Trucking, Natural-Gas Industry Benefit from Congress’ Tax-Credit Legislation

This story appears in the Dec. 22 & 29 print edition of Transport Topics.

Fleets that purchased new trucks or use natural gas could reap large tax credits thanks to a bill the Senate sent to President Obama.

Under the measure, carriers who bought new trucks or other equipment in 2014 will be able to take the full depreciation write-off. Usually, such investments must be spread over three years.

The measure means millions of dollars in savings for TCW Inc., said President David Manning.

“We think that it’s $3 [million] or $4 million that it’s going to save us,” Manning said. “It’s huge”

Manning estimated TCW purchased 120 new trucks in 2014.

The bill also renews the expired 50-cents-per-gallon tax credit for those who fill trucks with natural gas. Another credit of up to $30,000 is for those who build natural-gas fueling facilities.

Advocates said the tax credits are critical in helping build the fueling infrastructure and in helping fleets transition from diesel to natural gas. Natural-gas trucks can cost as much as $60,000 more than diesel-powered trucks, manufacturers have said.

“But of course this tax credit’s only for one year,” said Mike DelBovo, president of Saddle Creek Transport, one of the first natural-gas fleets.

Indeed, the bill is only good until Dec. 31. The depreciation and natural-gas credits have been around for several years, but had to be renewed on a year-to-year basis. They expired in December 2013, leaving companies with uncertainty since then.

The trucking industry was hoping for a two-year extension, but Congress declined to approve that after a partisan debate erupted this summer, leaving the bill lingering until the lame-duck session.

“We certainly are asking our folks to go back now and say, ‘All right, let’s get this put in place early for the next year, so that we can afford to buy more trucks and afford to continue to invest in the project,’ ” DelBovo said.

The $30,000 credit for new fueling infrastructure and the 50-cent fuel credit will help Saddle Creek pay for a $1.8 million expansion in its fueling facilities this year, he said.

Matthew Godlewski, president of Natural Gas Vehicles America, said: “Passage of the alternative-fuel tax and infrastructure credits helps build the network to support [natural-gas vehicles] and demonstrates continued support in the Congress for natural gas as a transportation fuel.

“There’s more work to be done, and we look forward to working with the new Congress on long-term measures that accelerate the industry,” he added.

Andrew Littlefair, president of Clean Energy Fuels in Seal Beach, California, said: “When the 114th Congress convenes in January, we will work closely with them to build on the natural-gas vehicle success story in 2015 and beyond.”

Also included in the bill is the renewal of the $1-per-gallon tax credit for biodiesel producers. The tax credit helps underwrite the higher cost of producing that alternative fuel relative to the cost of diesel production.

Other tax credits that trucking could claim under the measure include one for the use of propane fuel, in trucks or in forklifts for those with warehouses and distribution centers.

The bill also contains tax breaks for property improvement, such as for trucking companies making improvements to terminals. There also is an extension of the exclusion of gains on small-business stock, which would benefit some trucking companies.