Alternative motor vehicle credit
South Carolina offers an income tax credit for certain qualifying alternative motor vehicles. For companies purchasing vehicles for business use, the credit may provide tax savings on eligible vehicles, including qualifying fleet purchases.
The state credit equals 20% of the federal Alternative Motor Vehicle Credit allowed under Internal Revenue Code Section 30B. Eligibility is limited to specific types of vehicles and federal requirements apply. All-electric vehicles and plug-in hybrid vehicles do not qualify for this credit.
Eligibility requirements
To qualify for the Alternative Motor Vehicle Credit, a company must:
- Be a South Carolina resident taxpayer
- Qualify for the federal Alternative Motor Vehicle Credit under Internal Revenue Code Section 30B
Qualifying vehicles may include certain fuel cell, advanced lean-burn technology, hybrid and alternative fuel motor vehicles. All-electric vehicles and plug-in hybrid vehicles do not qualify for this credit.
For companies purchasing vehicles for business use, qualifying vehicles may include individual business vehicles or vehicles purchased as part of a fleet, provided applicable eligibility requirements are met.
Credit details
The South Carolina credit equals 20% of the federal Alternative Motor Vehicle Credit amount calculated under Internal Revenue Code Section 30B.
Although the federal Section 30B credit has expired, South Carolina law treats its provisions as permanent for purposes of the state credit. Federal phase-out limits under Section 30B(f) do not apply when calculating the South Carolina credit.
Unused credits may be carried forward for up to five years.
Claiming the credit
The South Carolina Department of Revenue (SCDOR) administers the Alternative Motor Vehicle Credit. Companies claim the credit using Form TC-35, Alternative Motor Vehicle Credit, filed with the applicable South Carolina income tax return.
