In one of the final acts of the Biden administration, the Department of Treasury and the IRS have unveiled proposed regulations for the tax credit under Section 45W of the Internal Revenue Code. This section, enacted as part of the Inflation Reduction Act of 2022, allows businesses to claim a tax credit for purchasing eligible commercial clean vehicles, which include electric, hydrogen, and specific hybrid cars and trucks. The credit, capped at 30% of the vehicle's purchase price (15% for hybrid vehicles), is designed to offset the incremental cost compared to gas- or diesel-powered alternatives. The maximum credit varies based on the vehicle's gross weight, ranging from $7,500 to $40,000. The proposed regulations aim to provide much-needed guidance for taxpayers to assess their eligibility for the credit, understand the incremental cost calculation, and ensure compliance with the set criteria. Some key points of the proposed regulations include rules for calculating incremental costs, allowing reliance on manufacturer determinations or IRS safe harbor notices, guidance on determining incremental costs for used vehicles, and specifying reporting requirements. However, the regulations also make it clear that no double benefits will be allowed, meaning a vehicle can't claim credits under both Section 30D and Section 45W. While these regulations offer clarity for businesses seeking to benefit from the tax credit, there is a sense of uncertainty surrounding the future of Section 45W. Congress may potentially repeal this section, so taxpayers are advised to stay informed and participate in the public comment process before the deadline on March 17, 2025.