Operators of propane forklifts can claim a US tax credit of USD0.50 per gallon, but industry awareness of the law and use of its provisions appear to be low.

The US Congress enacted Public Law 109-59 to encourage use of alternative fuels including liquefied petroleum gas, or propane, for an initial three-year period starting October 1, 2006. Forklifts qualify under the law's definition of an off-highway business motor vehicle.

"There is no registration deadline per se for forklift operators to take advantage of the tax credit for propane forklift fuel," says Michael Troop, vice president of legislative affairs with the Washington, DC-based National Propane Gas Association (NPGA).

Generally, "I have heard very few complaints about the process," Troop says. "Apparently, the IRS has done a pretty good job with the registration process."

For a company applying for registration, the Internal Revenue Service (IRS) conducts a due diligence process to insure the applicants are who they claim they are and engage in the business they claim, Troop explains. "The IRS also checks to make sure that the business is current with taxes and has not had any problems or violations in the past."

Most operators need to use IRS forms 637 for alternative fueler registration and 4136 for claiming the credit.

NPGA represents more than 3,500 propane-related marketers, equipment and appliance manufacturers, cylinder and tank fabricators and LPG transporters.

Contact with the US business offices of several forklift dealers confirmed minimal awareness about the propane tax credit.

Operations of distributor Oram Material Handling Systems Inc include a rental fleet with propane-powered forklifts, says David Wagner, vice president and chief financial officer of the firm in Kansas City, Kansas. So far, Oram has not taken advantage of the credit.

For each rental, "we charge a flat USD15 per invoice for a full tank of propane (8.25 gallons) when the forklift is delivered to the customer," Wagner says. "I don't know how we would incorporate the tax credit. Each tank would be eligible for around USD4 tax credit."

Wagner says he is unaware of any Oram customers claiming the tax credit.

Oram distributes multiple brands of material handling equipment including Nissan forklifts and Barrett industrial trucks.

At another dealership, Bret Meyer, controller of OKI Systems Ltd of Cincinnati, Ohio, says: "We may look into it for the future. We do not do a lot with propane trucks." Mostly, OKI distributes Crown electric forklifts.

USD0.50 per gallon credits are also available for alternative fuels other than propane. These include P-Series renewable biomass-derived components and extracts from natural gas, compressed natural gas, liquefied hydrogen, any coal-derived liquid fuel, liquid hydrocarbons derived from biomass and liquefied natural gas.

July 13-14 postings on a Forkliftaction.com News' Discussion Forum mentioned the availability of the US propane tax credit for forklift operators.