DC Velocity - April 2011

inbound

Propane-fueled forklifts catch a (tax) break

Proponents of propane fuel like to point out its benefits for forklifts: It lets them maintain consistent power, it enables them to travel at higher speeds than trucks using other energy sources (under certain conditions), and it’s cleaner than gasoline and diesel, they say.

Now advocates can add “tax breaks” to the list of benefits. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 included a propane fuel tax credit of 50 cents per gallon through Dec. 31, 2011. The credit is retroactive to Jan. 1, 2010, but there’s a catch: To receive the retroactive credit, forklift fleet operators must register with the Internal Revenue Service as an “alternative fueler” and file a one-time claim no later than Aug. 1, 2011, says Brian Feehan, vice president of the Propane Education & Research Council (PERC). Filers can claim 2011 fuel credits at the end of the year.

The law authorizes the tax
credit for on- and off-road
vehicles that transport loads
and have propane-fueled inter-
nal combustion engines. The
IRS has specifically identified
forklifts as eligible, Feehan said
in an interview. It’s a benefit
worth pursuing, he added.
“Fifty cents per gallon can add
up to a significant amount.”
The credit is applied differ-
ently to on- and off-road
equipment: Forklift operators
receive the credit directly, but
whoever dispenses the fuel for on-road vehicles gets the tax break. That is, if your
delivery vans fuel up at a public station instead of at your own facility, the sta-
tion operator can claim the credit.

The propane fuel credit is not new. It had been in place (under another law) for three years but expired in 2009; it was then renewed in December 2010, but only for one year. The short timeline, Feehan said, was designed to align the expiration of propane’s tax incentives with those of other alternative fuels.

Will Congress extend the 50-cent credit past the end of 2011? Feehan says it’s hard to predict, but he believes the main arguments in favor of alternative fuels—reduced dependence on foreign oil and cleaner air—have not gone away and, if anything, are even stronger now than when the credit was first introduced.

Information about the new tax law’s propane fuel provisions is available from the National Propane Gas Association at http://npga.org/i4a/pages/ index.cfm?pageid=1717. The IRS forms—Form 637 (for registering as an alternative fueler) and Form 4136 (for filing tax credit claims)—are available at http://www.irs.gov/formspubs/index.html.

We should note that the information in this article does not constitute tax advice. Be sure to consult your tax advisor before taking any action. ;

Europe may be tradition-bound in some respects, but when it comes to supply chain strategies, it’s on the cutting edge. You can learn what’s new across the pond at the Council of Supply Chain Management Professionals’ “CSCMP Europe 2011” conference, slated for June 8 through 10 in Barcelona, Spain.

This year’s conference will focus on mastering financial strategies that drive supply chain value. The “don’t-miss” keynote speaker will be Peter R. Williams, Procter & Gamble’s vice president, product supply, Central and Eastern Europe, the Middle East, and Africa. Drawing on his own company’s experience, Williams will discuss designing supply chains for emerging markets.

Other presentations will include supply chain strategies that reduce working capital without compromising customer service (Kraft Foods Europe), agile supply chains (Intel International B.V.), and how to increase supply chain adaptability (Toyota Motor Europe).

CSCMP Europe 2011 will offer a special bonus opportunity this year. Participants will be able to attend—at no extra cost—the International Logistics and Material Handling Exhibition (SIL), conveniently located across the street. SIL, the second-largest event of its kind in Europe, draws some 50,000 attendees from Europe, Asia, and Latin America each year.