South Carolina Hydrogen Laws and Incentives

State Incentives

Alternative Fuel Vehicle (AFV) Sales Tax Rebate

Beginning July 1, 2008, a $300 sales tax rebate may be applied to in-state purchases of the following: flexible fuel vehicles (FFVs) capable of operating on E85 motor fuel; hydrogen fuel cell vehicles; electric vehicles, hybrid electric vehicles; plug-in hybrid electric vehicles (PHEVs); and vehicles with a U.S. Environmental Protection Agency city fuel economy rating of at least 30 miles per gallon. Additionally, a sales tax rebate up to $500 has been established for the purchase of equipment that results in the conversion of a conventional hybrid electric vehicle to a PHEV, or for equipment to convert a conventional vehicle to operate on propane, compressed natural gas, liquefied natural gas, hydrogen, or E85. These rebates only apply to vehicles and equipment purchased prior to July 1, 2013. (Reference Senate Bill 243, 2007, and South Carolina Code of Laws 12-63-20)

Alternative Fuel Vehicle (AFV) Tax Credit

A state income tax credit equal to 20% of the federal fuel cell, advanced lean burn, HEV, and AFV credits is available to South Carolina resident taxpayers who are eligible for and claim the federal credits. If the amount of the credit exceeds the taxpayer's liability for the applicable tax year, any unused credit may be carried forward and claimed in the five succeeding taxable years. The state tax credit is calculated without regard to the phase out period limits of Internal Revenue Code Section 30(B)(f). (Reference South Carolina Code of Laws 12-6-3377)

State Laws and Regulations

Provision for Establishing Hydrogen Infrastructure Development Grants

The South Carolina Hydrogen Infrastructure Development Fund is created to fund grants administered by the South Carolina Research Authority to promote the development and deployment of hydrogen production, storage, distribution, and dispensing infrastructure and related products and services that enable the growth of hydrogen and fuel cell technologies in the state. (Reference Senate Bill 243, 2007, and South Carolina Code of Laws 11-46)

Hydrogen and Fuel Cell Tax Exemption

Effective October 1, 2007, the following are exempt from state sales tax: 1) any device, equipment, or machinery operated by hydrogen or fuel cells; 2) any device, equipment, or machinery used to generate, produce, or distribute hydrogen and designated specifically for hydrogen or fuel cell applications; and 3) any device, equipment, or machinery used predominantly for the manufacturing of, or research and development involving hydrogen or fuel cell technologies. (Reference Senate Bill 243, 2007, and South Carolina Code of Laws 12-63-2120)

Alternative Fuel Use Requirement

Whenever practical and economically feasible, all state agencies operating alternative fuel vehicles are required to use alternative fuels in those vehicles. Private businesses are encouraged to increase the use of alternative fuels in the state. (Reference Executive Order 2001-35)