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Ethanol (E85) Powered Vehicles: Financial incentives and tax credits (EVs)

Federal Incentives

Unfortunately, the only Federal incentive is for new, non plug-in hybrid vehicles. A tax credit of $250 - $3400 is available for qualified hybrids. It's complicated because the credit phases out after a manufacturer sells 60,000 hybrids of a given model.The ElectricDrive.org website keeps track of which hybrid vehicles qualify and the numbers of vehicles sold.

Currently, there is no federal incentive for converting a vehicle to run on E85.

Oregon Automotive Equipment Incentives

The Oregon Residential Energy Tax Credit program provides a tax credit for buying a new alternative fuel vehicle, or for converting a vehicle to run on ethanol blend (E-85 or higher.)

Here is the relevant language from the Oregon Department of Energy.
"The tax credit for new alternative-fuel vehicles is based on the incremental difference between the base price of the alternative-fuel vehicle and the base price of the gasoline-only version of the same make and model vehicle. The tax credit is 25 percent of the incremental difference or $750, whichever is less. The tax credit for vehicle conversions and charging/fueling systems is $750 or 25 percent of the cost, whichever is less."

If you do an ethanol conversion, GreenEngines will help you with the appropriate tax forms.

Oregon Biofuel Consumer Credit

Here is the relevant language from the Oregon Department of Revenue.
"If you use B99 or E85 biofuels in your alternative fuel vehicle, you may claim a credit of $0.50 per gallon of biofuel. The maximum credit per year is $200 (400 gallons) per vehicle. To qualify the vehicle must be registered in Oregon and be able to run on B99 or E85 biofuel."

To receive this credit:

1. Keep track of your E85 purchases.

2. Compute your allowable credits and enter the amount as an "Other credit" on your Oregon income tax return. Use numeric code 744 to identify the credits.

3. You must keep records to support your fuel purchases for five years.