Alternative Fuel Vehicles Tax Exemption

AZ Personal Tax Exemption residential

Quick Summary

Arizona offers a 100% use tax exemption when you convert a diesel vehicle to run on alternative fuel (including electricity) or purchase a vehicle already converted for this purpose, plus an exemption for the conversion equipment itself. You claim this exemption at vehicle registration with the Arizona Department of Transportation by providing proof of the conversion or purchasing a pre-converted vehicle.

AI-generated summary • Updated 7/12/2026

Program Details

Program ID: 22148
Last Updated: 3/26/2026

Eligibility

Eligible Sectors

residential

Eligible Technologies

medium-duty electric vehicles heavy-duty electric vehicles

Program Summary

Per Arizona state law, alternative fuel vehicles receive a 100% use tax exemption if the vehicle was manufactured as a diesel vehicle and was converted to run on alternative fuel. This tax exemption is also available for equipment that is installed in a diesel fuel motor to convert it to run on alternative fuel. The term alternative fuel includes electricity.

Contact & Resources

Contact Email

[email protected]

Additional Resources

https://azdor.gov/individuals/income-tax-filing-assistance/understanding-use-tax

Please verify current program details with the administering agency before making any financial decisions.