Tax Credit for Natural Gas-Fueled Cars May Be Doubled, Extended

Tax incentives for buying vehicles fueled by natural gas would be doubled in size and extended for a decade under legislation being introduced by U.S. Senate Majority Leader Harry Reid of Nevada.

The credits, which can be used to cover 80 percent of the added cost to buy natural gas-fueled vehicles over conventional automobiles, would jump to as high as $12,500 for passenger cars and light trucks and as much as $64,000 for higher weight-class vehicles, according to a summary of the legislation.

The bill would also expand and extend tax incentives for purchases of natural gas used as a vehicle fuel and for the installation of refueling stations. The credits were set up as part of a broad energy law passed in 2005 to help secure energy supplies and lower costs, issues that are back in the forefront of Congress following record-high oil and gas prices in 2008.