Price tag for tax break expansion could top $7M

Associated Press Modified: September 24, 2012 at 3:45 pm •  Published: September 24, 2012

BATON ROUGE, La. (AP) — Louisiana paid as much as $7 million for a two-month expansion of a tax credit designed to encourage the purchase of alternative fuel vehicles, an expansion later rescinded by Gov. Bobby Jindal and followed by the resignation of the state's revenue secretary.

The Department of Revenue issued a little-noticed rule in April governing the state's alternative fuel tax credit, which enlarged the list of qualifying vehicles. Jindal scrapped the rule in June amid complaints it could wreck the state's budget, siphoning millions from the state treasury.

But it appears hundreds of people took advantage of the expanded list while it was on the books.

More than 2,500 claims for the alternative fuel tax credit — totaling $7.4 million — were paid when the expanded list was in effect, according to Department of Revenue data provided in response to a request from The Associated Press.

Revenue spokesman Byron Henderson said the department doesn't know how many of the credits involved car and truck models from the expanded list.

However, at least $3.3 million of the credits claimed were for 1,125 amended income tax returns, a likely indication that taxpayers revised their returns when they learned of the expanded list released in the April 30 rule.

Jindal rejected the rule June 14, though he didn't cite complaints that the tax credit could become a budget-buster. Instead, his office said the rule was jettisoned because the law governing issuance of an emergency rule was not followed.

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