Alternative fuel property credit

South Carolina provides an income tax credit for eligible property used to distribute, dispense or store alternative fuel at qualifying commercial fuel facilities in South Carolina.  The credit equals 25% of the cost of purchasing, constructing and installing eligible property and is claimed in three equal annual installments. 

This credit has expired for new qualifying investments. Property must have been placed in service by January 1, 2026 to qualify. 

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Eligibility

Eligible property and fuel types

Eligible property

Eligible property includes:

  • Pumps
  • Compressors
  • Storage tanks
  • Related equipment

Equipment must be directly and exclusively used to distribute, dispense or store alternative fuel. It also must be labeled and clearly identified for that purpose. 

Alternative fuel

For purposes of this credit, alternative fuel includes:

  • Compressed natural gas
  • Liquefied natural gas
  • Liquefied petroleum gas

The fuel must be dispensed for use in motor vehicles or dispensed by a distributor or facility.

Claiming the credit

Claiming the credit 

The South Carolina Department of Revenue (SCDOR) administers the Alternative Fuel Property Credit. Companies with qualifying property placed in service by January 1, 2026 claim the credit using Form TC-59, Alternative Fuel Property Credit. 

SCDOR resources 

Alternative Fuel Property Credit requirements and guidance TC-59 credit form and instructions
Credit details

Credit amount and structure

The credit equals 25% of the cost of purchasing, constructing and installing eligible property.

The credit must be claimed in three equal annual installments beginning within the tax year the property is placed in service.

If, during one of the years in which a credit installment accrues, property used for distributing, dispensing or storing renewable fuel is disposed of or taken out of service and is not replaced, the credit expires and the taxpayer may not claim any remaining installments.

Eligible taxpayers

For purposes of this credit, “taxpayer” includes:

  • Sole proprietors
  • Partnerships
  • Corporations of any classification
  • Limited liability companies
  • Associations taxable as business entities

The term also includes the State and any agency, instrumentality, authority or political subdivision, including municipalities.

Carryforward and limitations

General provisions related to this credit include:

  • Any unused portion of the unexpired credit may be carried forward for up to 10 tax years.
  • The credit is claimed on Form TC-59, titled “Alternative Fuel Property Credit.”
  • A taxpayer who claims any other credit for the same costs of purchasing, constructing and installing property at the facility may not claim this credit for those same costs.
  • The State or any agency, instrumentality, authority or political subdivision, including municipalities, may transfer the credit. If transferred, the transferring entity must notify the Department of Revenue.
Availability

Credit availability

The Alternative Fuel Property Credit has expired for new qualifying investments. Property must have been placed in service by January 1, 2026 to qualify. 

Companies with previously qualifying property may still be eligible to claim remaining installments or carryforward amounts. 

FAQs

Frequently asked questions