Environmental Group Seeks Swift Issuance of Guidance on Hybrid Truck Tax Credit

The Energy Policy Act of 2005 authorized tax credits to spur the purchase of fuel-saving medium and heavy-duty hybrid trucks. That authority can not be implemented until the IRS issues a tax guidance for how the tax credit should be implemented. I am writing to ask you to accelerate the issuance of this tax guidance, an important tool in spurring diffusion of a technology that will significantly reduce fuel consumption and pollution from diesel trucks.

As you know, Environmental Defense has been working to put cleaner, more fuel-efficient trucks on the road. Our partnership with FedEx developed a delivery truck that travels 50% farther on a gallon of fuel, and cuts smog-forming emissions by 75% and soot by 95%. FedEx now has over 90 hybrid-electric delivery trucks on the road, and UPS, Coca-Cola, Frito-Lay, Purolator Courier are exploring the technology. Congress recognized that until fleets get enough operating experience with hybrids to place orders large enough to bring production to scale, subsidies or other incentives are an important tool to overcome upfront costs.

Financial incentives such as the Energy Policy Act tax credits play a critical role in making hybrid trucks affordable now, and realizing the full environmental benefits of this technology. Although the statute intends for the tax credits to take effect for vehicles purchased this year, the Internal Revenue Service has not yet issued its guidance for the medium- and heavy-duty truck sector.

I am writing to ask that the IRS provide this guidance as soon as possible, so that companies that are considering buying hybrid trucks, or have already purchased them, will be able to apply the tax credit to vehicles purchased this year. Hybrids are a proven technology that can improve fuel economy and air quality today. With your help, we can put more of these trucks on the road this year and in years to come.

Thank you for your consideration.