Alternative Fuel Vehicle (AFV) Tax Credit

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Type: State Incentives | Jurisdiction: Oklahoma

For tax years beginning before December 31, 2028, a one-time income tax credit is available for up to $50,000 towards the cost of purchasing a new original equipment manufacturer AFV or converting a vehicle to operate on an alternative fuel. Tax credit amounts vary depending in the gross vehicle weight rating (GVWR) of the vehicle:

GVWRMaximum Amount
6,000 pounds (lbs.) or below$5,500
6,001 lbs. to 10,000 lbs.$9,000
10,001 lbs. to 26,500 lbs.$26,000
Greater than 26,501 lbs.$100,000

The state also provides a tax credit of 10% of the total vehicle cost, up to $1,500, if the incremental cost of a new AFV cannot be determined or when an AFV is resold, as long as a tax credit has not been previously taken on the vehicle. Equipment used for conversions must be new, not previously used to modify or retrofit any vehicle, meet applicable federal and state safety standards, and must be installed by a state certified alternative fuels equipment technician. Eligible alternative fuels include natural gas, propane, electric, and hydrogen. Tax credits may be carried forward for up to five years.

(Reference Senate Bill 1857, 2022 and Oklahoma Statutes 68-2357.22)

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