WASHINGTON, D.C.U.S. Sen. Barack Obama (D-Ill.) April 5 asked Energy Secretary Samuel W. Bodman to affirm the Bush administrations commitment to reducing our dependence on foreign oil by pressing the Internal Revenue Service (IRS) to immediately allow service stations to take advantage of a law that would greatly increase consumer access to renewable fuels, such as E85.
It has now been eight months since this bill became law, and I am frustrated that the Internal Revenue Service (IRS) has yet to make the tax credit available to station owners who want to sell alternative fuels, Obama wrote in a letter to Bodman. More frustrating still are reports that an initial IRS interpretation would only allow this tax credit to be used once a year by a taxpayer, even though I, and other advocates of the provision, intended the credit to be available to companies that own more than one service station and want to install alternative fuel equipment at multiple locations.
Obama asked Bodman to use his leverage as Energy Secretary to pressure the IRS to correctly interpret legislation Obama strongly supported that would provide a tax credit of up to $30,000 for the installation of equipment that would allow fueling stations to offer alternative fuels. The legislation was signed into law last year, but the IRS has yet to make the credit available to station owners.
Obama said he is particularly concerned by initial IRS interpretations of the tax credit that would only allow it to be used once per year per individual. When Obama and other advocates wrote and supported this tax credit legislation last year, they clearly intended the credit to be used by companies owning more than one service station to install alternative fuel equipment at multiple locations.
Obama asked Bodman to pledge to advocates of the tax credit and to farmers across Illinois to support this legislation. It is estimated that the tax credit would triple the number of stations offering E85 in the first year after its implementation.
Its time for the federal government to do its part to ensure that consumers who purchase flexible-fuel vehicles have access to alternative fuels, Obama wrote. One way to accomplish this goal is for you to clearly state your support for an interpretation of the alternative fuels tax credit that encourages gas station chains to offer alternative fuels at all of their locations across the country.
It is estimated that there are more than 4 million flexible-fuel vehicles on the road today, but only several hundred stations where E85 is sold.
From the May 24-30, 2006, issue