Oklahoma Incentives and Laws

Last Updated July 2006

State Incentives

Alternative Fuel Vehicle (AFV) Tax Credit

Prior to January 1, 2009, Oklahoma provides a one-time income tax credit for 50% of the cost of converting a vehicle to operate on an alternative fuel, or for 50% of the incremental cost of purchasing a new OEM AFV. The state also provides a tax credit for 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. The alternative fuels eligible for the credit include compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), methanol, and electricity. This tax credit extends to low-speed electric vehicles as defined by NHTSA in 49 C.F.R. 571.500, to forklifts and other similar self-propelled vehicles, and to qualified electric and hybrid electric vehicles. For qualified electric vehicle property propelled by electricity only, the basis for the credit is the full purchase price of the vehicle. For vehicles also equipped with an internal combustion engine, the basis for the credit is limited to the portion of such motor vehicle which is attributable to the propulsion of the vehicle by electricity. (Reference Oklahoma Statutes Section 68-2357.22)

Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Tax Credit

The state provides a tax credit for up to 50% of the cost of installing refueling infrastructure for AFVs. These tax credits may be carried forward for up to three years. The alternative fuels eligible for the credit include compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), methanol, and electricity. (Reference Oklahoma Statutes Section 68-2357.22)

Biodiesel Production Facility Tax Credit

For tax years beginning after December 31, 2004, and before January 1, 2012, a biodiesel (B100) production facility shall be allowed a credit of $0.20 per gallon of biodiesel produced. Any biodiesel facility producing at least 25% of its nameplate design capacity for at least 6 months after the first month for which it is eligible to receive the credit, on or before December 31, 2007, is eligible. The credit shall be allowed for 60 months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2011. Eligible facilities can also receive a credit of $0.20 per gallon for biodiesel produced in excess of the original nameplate design capacity which results from expansion of the facility completed on or after the effective date of this act and before December 31, 2007. Beginning January 1, 2012, a biodiesel facility shall receive a credit of $0.075 per gallon of biodiesel, for new production for a period not to exceed 36 consecutive months. Additional restrictions apply. (Reference Oklahoma Statutes Section 68-2357.67)

Ethanol Production Tax Credit

For tax years beginning after December 31, 2003, and before January 1, 2011, an ethanol production facility is allowed a tax credit in the amount of $0.20 per gallon of ethanol produced, for 60 months beginning with the first month for which the facility is eligible to receive such credit. The credit may only be claimed if the ethanol facility maintains an average production rate of at least 25% of its nameplate design capacity for at least six months after the first month for which it is eligible to receive the credit. Producers are also eligible for an expansion credit of $0.20 per gallon of ethanol produced in excess of the original nameplate capacity. Beginning January 1, 2011, an ethanol facility is eligible for a credit of $0.075 per gallon of ethanol, before denaturing, for new production for a period not to exceed 36 consecutive months. (Reference House Bill 1556, 2005 and Oklahoma Statutes Section 68-2357.66)

Ethanol Fuel Retailer Tax Credit

Beginning January 1, 2006, retailers of ethanol-blended fuel (a blend of gasoline and ethyl alcohol consisting of not more than 15% ethyl alcohol by volume) may claim a motor fuel tax credit of $0.016 for each gallon of ethanol fuel sold in Oklahoma, if the retailer provides a price reduction to the purchaser of the ethanol fuel in the same amount. This incentive is effective unless the federal government mandates the use of reformulated fuel in an area within the State of Oklahoma that is in non-attainment with the National Ambient Air Quality Standards. (Reference House Bill 1556, 2005 and Oklahoma Statutes Section 68-500.10-1)

Alternative Fuel Vehicle (AFV) and Refueling Infrastructure Loans

Oklahoma has an Alternative Fuels Loan program to help convert government-owned fleets to operate on alternative fuels. This program provides 0% interest loans for converting vehicles to operate on an alternative fuel, for the construction of refueling infrastructure, and for the incremental cost associated with the purchase of an OEM AFV. The program provides up to $10,000 per converted or newly purchased vehicle and up to $150,000 for refueling infrastructure. Repayment is made from fuel savings during a maximum seven-year period. If the price of alternative fuels does not remain below the price of the conventional fuel that was replaced, repayment is suspended. Eligible applicants include state and county agencies and divisions, municipalities, school districts, mass transit authorities, and public trust authorities.

Alternative Fuel Vehicle (AFV) Loans

Oklahoma has a private loan program with a 3% interest rate for the cost of converting private fleets to operate on alternative fuels, for the incremental cost of purchasing an OEM AFV, and for the installation of AFV fueling infrastructure. The repayment of the loan is made from fuel savings during a maximum three-year period.

Point of Contact

Clayton Robinson
SEP Projects/ Alternative Fuels Loan Program Officer
Oklahoma Department of Commerce, State Energy Office
Phone (405) 815-5249
clayton_robinson@odoc.state.ok.us
 

State Laws and Regulations

Alternative Fuels Commission

The Oklahoma Biofuels Development Act was created to encourage the processing, market development, promotion, distribution, and research of fuels derived from grain, ethanol or ethanol components, biodiesel, bio-based lubricants, co-products, or by-products. The Oklahoma Biofuels Development Advisory Committee will serve until June 1, 2010 to conduct a systematic review and study of the ethanol and biodiesel industry in Oklahoma and other states, study the feasibility of developing and enhancing the ethanol and biodiesel industry in Oklahoma and otherwise encourage market development, promotion, distribution and research on products derived from grain, ethanol or ethanol components, bio-based products, co-products, or by-products. (Reference Oklahoma Statutes Section 2-1950.10)

Alternative Fuel Vehicle (AFV) Acquisition Requirements

Under the Alternative Fuels Conversion Act, all school and government vehicles may be converted to operate on an alternative fuel, and all school districts should consider only purchasing school vehicles which have the capability to operate on an alternative fuel. The Act also requires all school and government vehicles capable of operating on an alternative fuel to use the fuel whenever a refueling station is in operation within a five-mile radius of the respective department or district and the price of the alternative fuel is cost competitive. If school and government vehicles must be refueled outside the five-mile radius and no refueling station is reasonably available, the school and government vehicles are exempt from this requirement. (Reference Oklahoma Statutes Section 74-130.3)

Neighborhood Electric Vehicle (NEV) Access to Roadways

Low-speed electric vehicles (Neighborhood Electric Vehicles manufactured in compliance with the National Highway Traffic Safety Administration standards for low-speed vehicles in 49 C.F.R. 571.500) are allowed to operate on Oklahoma streets and highways with a posted speed limit of 35 miles per hour or less. (Reference Oklahoma Statutes Section 47-11-805.1)

Alternative Fuel Labeling Requirement

In lieu of the motor fuel excise tax, Oklahoma levies an annual flat fee on motor vehicles including passenger automobiles, pickup trucks, vans and heavy-duty vehicles using LPG, CNG, LNG, methanol, or blends of 85% methanol and 15% gasoline (M85). CNG, LNG, methanol, and M85 vehicles weighing less than one ton are taxed at a rate of $100 per vehicle per year, and vehicles weighing more than one ton are taxed at a rate of $150 per vehicle per year. Vehicles must display a decal issued on a yearly basis by the Oklahoma Tax Commission. (Reference Oklahoma Statutes Section 68-723)

Alternative Fuel Vehicle (AFV) Technician Training

The Alternative Fuels Technician Certification Act regulates the training, testing, and certification of technicians who install, modify, repair, or renovate equipment used in the fueling of AFVs and the conversion of any engines to alternative fueled engines. This includes OEM manufactured engines dedicated to operate on an alternative fuel. Electric vehicles (EVs), electric charging stations, and EV technicians must also comply with the rules and regulations of this Act. (Reference Oklahoma Statutes Sections 74-130.11 through 74-130.24)

Utilities/Private Incentives

There are currently no known utility or private incentives offered in Oklahoma

Oklahoma Points of Contact: