Green Driver State Incentives in LouisianaPage Overview
For a state famous for bayous and accessible coastline, Louisiana understands the paramount importance of a clean environment. To help entice its drivers to lower their emissions and help staunch the processes of global warming, LA offers money- and time-saving incentives to those with fuel-efficient cars.
Please note that Louisiana's eco-friendly incentives and related laws might evolve. Two additional resources to consult include your local Office of Motor Vehicles (OMV) branch and the Alternative Fuels Data Center. Of course, all drivers—regardless of whether they drive an electric car, hybrid, or alternative fuel vehicle—must abide by LA traffic laws when traveling our public roads.
The Office of Motor Vehicles exempts new vehicles from computer diagnostic testing for the first two years*. However, not all Louisiana-registered vehicles require an emissions inspection as a requirement of first-time LA car registration or registration renewal.
In fact, the emissions test requirement only applies to gasoline-powered passenger cars, light- and heavy-duty trucks (with a gross vehicle weight rating of 10,000 pounds or less) registered in the 5-parish Baton Rouge ozone nonattainment area. This includes the Louisiana parishes of:
- East Baton Rouge.
- West Baton Rouge.
*Louisiana calculates this 2-year period starting from the vehicle's model year. Please note that exempt vehicles must still undergo the visual anti-tampering check and gas cap integrity test required of all Louisiana-registered vehicles. For more on emissions inspection exemptions, requirements, and safety inspection specifics consult our page titled LA Smog and Emissions Checks or the driver resources of the Louisiana Department of Environmental Quality (DEQ). You can also call the DEQ at (225) 219-3530.
To find an inspection station in your parish, jump to the locator widget at the bottom of the page.
Some Louisiana auto insurance providers offer insurance discounts for having green driving habits and/or driving a fuel-efficient vehicle. Consult your car insurance company about potential green vehicle discounts such as:
- Hybrid auto discounts.
- Alternative fuel vehicle (AFV) discounts.
- Economy car discounts.
- Low-mileage discounts.
- Pay as you drive discounts.
Keep in mind that auto insurance discounts vary by carrier and circumstances. For example, you might receive a 10% discount on car insurance for owning or leasing a hybrid car, while maintaining low mileage can earn you up to a 30% auto insurance discount.
If your current LA auto insurance provider doesn’t reward eco-friendly driving, find one that does. Compare auto insurance rates online and save some green for going green.
Owning an alternative energy vehicle might save you money thanks to a few local and federal tax credits. Read on for more details. Then, if you have individual tax questions on taking advantage of these incentives, consult a tax professional, the IRS Taxpayer Assistance Center, or Louisiana's Department of Revenue.
Alternative Fuel Vehicle Conversion and Fueling Income Tax Credit
Louisiana taxpayers with an alternative fuel vehicle might be eligible for a significant tax break. As long as your vehicle is a Louisiana-registered and dedicated AFV, you might earn an income tax credit of:
- 50% of what you spend to convert your vehicle to run on an alternative fuel.
- 50% of the incremental cost of buying your original-equipment manufacturer AFV.
- 50% of what you spend on alternative fueling equipment.
- 10% of your AFV purchase cost (not to exceed $3,000).
Another factor that determines whether you can take the AFV tax credit is the year in which you incurred such costs. That’s because the State’s definition of alternative fuels shifted slightly in 2014.
Through 2013, the State definition of alternative fuels (for the purpose of this incentive) includes:
- Compressed natural gas (CNG).
- Liquefied natural gas (LNG).
- Liquefied petroleum gas (propane).
- Biofuel and biodiesel.
Or, if your vehicle runs on some other fuel that meets or exceeds federal clean air standards, it also qualifies.Purchases made after January 1, 2014 fall under a shorter list that only includes:
- Natural gas.
- Advanced, non-ethanol based biofuels (not counting flexible fuel vehicles).
*For the purpose of this incentive, electricity comes with a few caveats. Your electric car must:
- Have at least four wheels.
- Have a primary function as an on-street vehicle.
- Be able to reach a minimum speed of 55 miles per hour (mph).
- Have a four kilowatt-hour battery capacity.
- Have the ability to be externally charged.
For more on the AFV-conversion tax credit, consult Louisiana Revised Statutes 47, 6035. The Alternative Fuel Data Center also offers thorough details for those who have either converted or purchased an alternative fuel vehicle.
Biodiesel Equipment and Fuel Tax Exemption
Also exempt from state sales and use taxes are:
- Certain types of equipment used to manufacture, produce, or extract biodiesel.
- Unblended biodiesel* that is used as fuel by a registered manufacturer. Currently, this exemption is valid until June 30, 2015.
* Unblended biodiesel is defined as B100 fuel that meets ASTM specification D6751.
For more details, refer to Louisiana Revised Statute 47:301.
Green Jobs Tax Credit
Certain qualified capital infrastructure projects (such as those in "green job industries") in Louisiana might be eligible for corporate or income tax credits when the projects are directly related to (but not limited to) biofuels and advanced drivetrain vehicles. The tax credit is based on investment costs and is anywhere from 10% to 20% of project costs up to $1 million per green state-certified project.
Payroll for employees (who must be Louisiana residents) might be eligible for an extra 10% credit.
As always caps, credits, and restrictions might apply. Please refer to Louisiana Revised Statute 47:6037 for specific details.
Federal Tax Credits for Fuel-Efficient Vehicle Owners
Owning fuel-efficient cars might also qualify you for federal tax credits offered by the IRS. Eligible eco-friendly vehicles include:
- Electric cars (EVs).
- Plug-in hybrids (PEVs).
- Alternative fuel vehicles (AFVs).
For additional information on federal tax credits for green vehicle owners, consult fueleconomy.gov's Tax Incentive Information Center.
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