Green Driver State Incentives in Oklahoma

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Oklahoma drivers concerned with protecting the environment can take advantage of numerous green driver incentives established specifically to promote eco-friendly driving. These range from state and federal tax incentives for fuel-efficient vehicles such as electric cars and hybrids to auto insurance discounts, from compressed natural gas (CNG) rebates to loans.

Oklahoma State and Federal Tax Incentives

Oklahoma offers a few tax incentives to green-minded drivers, in addition to the federal tax credits offered by the government to those who buy certain fuel-efficient vehicles. Read the following subsections to see if you're eligible for any tax breaks.

Come tax time, navigating these incentives can get tricky. Consider consulting a tax professional, your local Oklahoma Tax Commission or your local IRS Taxpayer Assistance Center.

Alternative Fuel Vehicle Income Tax Credit

Oklahoma taxpayers can take advantage of a one-time income tax credit for purchases of and conversions to alternative fuel vehicles. Specifically, the tax credit equals 45% of the incremental cost of either:

Buying a new AFV—Applies only to new original equipment AFVs (except electric vehicles). If the incremental cost of the new AFV can't be determined (or when the vehicle is resold), it can still earn you a tax credit equaling 10% of the total cost (up to $1,500), only if the tax credit has not already been taken.

Converting to an AFV—Applies only to new equipment, not yet used to modify or retrofit any other vehicle, that complies with applicable OK and federal safety standards, and is installed by a state-certified alternative fuels equipment technician.

Qualifying alternative fuels include:

  • Compressed natural gas (CNG).
  • Hydrogen.
  • Liquefied petroleum gas (propane).
  • Liquefied natural gas (LNG).

Oklahoma honors the tax credit for tax years prior to January 1, 2020, and allows taxpayers to carry over the tax credit for up to 5 years. Refer to Oklahoma Statutes 68-2357.22 for specifics.

Ethanol Sales Tax Exemption

Ethyl alcohol is sales-tax exempt when sold and used for blending with motor fuel. For specifics on this tax exemption for ethanol and claiming a refund, contact a Oklahoma Tax Commission office.

Biofuel Motor Fuels Tax Exemption

You are exempt from paying OK motor fuels tax on biofuels or biodiesel that you produce from crops grown on your property when using it to power a vehicle you own. Refer to Oklahoma Statutes 68-500.10-1 and 68-500.4 for full details.

Federal Tax Incentives for Green Vehicles

You might be eligible for a tax break by purchasing a fuel-efficient vehicle. The government offers federal tax credits when you buy one of the following new eco-friendly cars:

  • Electric cars (EV).
  • Hybrids.
  • Plug-in hybrids (PHEV).
  • Diesels.
  • Alternative fuel vehicles (AFV).

To find out if you're eligible to save even more money, check out fueleconomy.gov.

Auto Insurance Discounts for Eco-Friendly Driving and Green Vehicles

Some Oklahoma 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..
  • Pay-as-you-drive discounts.
  • Economy car discounts.
  • Low-mileage discounts.
  • Alternative fuel vehicle (AFV) discounts

Each provider and your circumstances can affect what discounts you can get. Owning or leasing a hybrid car may qualify you for up to a 10% discount on car insurance.

Comparing auto insurance rates online will help you get the discounts you deserve if your current OK auto insurance carrier doesn't reward eco-friendly driving

Oklahoma Natural Gas CNG Rebate Program

Oklahoma residents who invest in home-fueling systems or bought (or buy) compressed natural gas vehicles on or after June 18, 2012 might be eligible for a rebate through the CNG Rebate Program of Oklahoma Natural Gas. Rebate amounts vary, and are offered on a first-come, first-served basis:

  • Bi-fuel vehicles: $2,000.
  • Dedicated CNG vehicles: $2,000.
  • Residential home-fueling systems: $3,000.

Download a rebate application, or learn more via the CNG Rebate Program page. It also covers FAQs and details retroactive tax credits.

Compressed Natural Gas (CNG) Vehicle and Conversion Loans

Two lenders offer loans for those interested in driving a vehicle powered by compressed natural gas.

Communication Federal Credit Union New CNG and CNG Conversion Loans

Communication Federal Credit Union (CFCU) offers loans for:

  • New CNG vehicles—Funding to cover vehicle MSRP and cost of conversion.
  • Converting an existing vehicle to run on compressed natural gas—Funding to cover up to 115% of the NADA retail value.
  • Home refueling appliances.

Learn more about the CFCU CNG Vehicle Loan Program and how to apply online.

Allegiance Credit Union CNG Conversion Loans

Allegiance Credit Union offers CNG conversion loans to those interested in converting their pickup truck or sports utility vehicle (SUV) to run on compressed natural gas. For further details, contact this lender or apply online.

Weight Limit Increase for Idle Reduction Technology

Vehicles that use an auxiliary power unit (APU) or idle reduction technology unit to reduce fuel use and emissions may exceed what Oklahoma sets as the total gross weight limit by up to 400 lbs. This allowance makes up for the extra weight added by such units.

In order to take advantage of this exception, you must obtain proof of the unit's weight (either written proof or certification), and be able to demonstrate or certify the full functionality of your idle reduction technology.

Additionally, your written proof or certification must be available to law enforcement officers should they find your vehicle in violation of applicable weight laws. For specifics, refer to Oklahoma Statutes 47-14-109.

Stay Current on Oklahoma Green Driver Incentives

Oklahoma's green driver incentives and vehicle-related laws are subject to change. To stay up to date, bookmark this page and also consult your local Oklahoma Tax Commission branch and the Alternative Fuels Data Center.

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