Page 19 - mar-apr 2020

be eligible for the Alternative Fuel Tax Credit if it Section 4041 fuel excise tax, the individual gener-
purchased (rather than produced) the propane ally will neither be subject to the tax on his or her
in a transaction that was previously subject to the subsequent use of the propane as fuel in a motor
Section 4041 fuel excise tax vehicle or motorboat nor be eligible to claim the
Alternative Fuel Tax Credit
Tax-exempt entities
Entities that are exempt from income tax Forms and Procedure
that own their own fueling stations or take title to Generally, and on a prospective basis for
propane prior to delivery into the tank of a motor 2020, qualifying individuals and entities claim the
vehicle or motorboat (thus potentially subjecting Alternative Fuel Tax Credit on Schedule C of a
them to the Section 4041 fuel excise tax, unless timely-filed IRS Form 720, Quarterly Federal Excise
they are exempt) can claim the Alternative Fuel Return, to the extent of their Section 4041 fuel
Tax Credit regardless of whether they use the pro- excise tax liability for the quarter at issue The IRS
pane in their own motor vehicles and motorboats is expected to update Schedule C of Form 720
or sell the propane to other customers These soon to reflect the reinstatement of the credit. To
entities can claim any Alternative Fuel Tax Credit the extent that a qualifying individual or entity’s
that exceeds their Section 4041 fuel excise tax lia- Alternative Fuel Tax Credit exceeds its Section
bility in a given quarter as a direct cash payment Continued on page 20...
from the U S Treasury Depart-
ment

Individuals
Individuals who are
subject to the Section 4041
fuel excise tax on their use of
propane as fuel in a motor
vehicle or motorboat are eli- Your SINGLE SOURCE for
gible to claim the Alternative
Fuel Tax Credit to “zero out”
that tax liability, but generally
will not be able to claim any
benefit for the portion of the
credit that exceeds their tax
liability (either in cash or in a
refundable income tax credit)
unless they use the propane and many, many more!
in their trade or business, in Stop in and see us!
which case they can claim
the full credit (with the excess
amount claimed as a refund- 1405 Sinnett Avenue • Dothan, Alabama 36303
able income tax credit) Note 800-433-8925
that if an individual acquired
the propane in a sale that
was previously subject to the

19 Alabama Propane Gas Association | March / April 2020