Oklahoma tax credits on electric vehicles to end July 1
by Jennifer Palmer for OKNews.com, June 2, 2010
The state has pulled the plug on tax credits for electric vehicle buyers.
A law passed Friday, the final day of the legislative session, eliminating the tax credit effective July 1. The changes won’t impact existing tax credit applications or pending litigation because it isn’t retroactive, the Oklahoma Tax Commission said.
Though individuals will no longer be able to claim a state tax credit on electric cars, the law adds a new incentive for manufacturers. Credits of $500 for low-speed, $1,000 for medium-speed and $2,000 for highway-capable electric vehicles will now be available to companies producing these vehicles in the state.
Atlanta-based Wheego is considering Piedmont as the site of its new production facility, but Chief Executive Officer Mike McQuary said Tuesday the change to Oklahoma’s law is “a disappointment.”
“The consumer tax credit was the most attractive thing for us about coming to Oklahoma,” he said. It had been successful in getting more Wheego cars on the road, he added.
Wheego plans to decide in the near future if it will build its new production plant.
“Oklahoma went from the top of the list to somewhere in the pack,” McQuary said.
Rep. Jeff Hickman, R-Dacoma, who authored the bill, said the manufacturers’ credits were added with the hopes of landing the Wheego facility or others like it, to create jobs and bring in new business.
“I think if the government is going to be involved, we need to be doing things that create jobs and invest in the state,” Hickman said.
The consumer credit, he said, didn’t create jobs or have a positive fiscal impact on the state. It had become too costly.
So far, the approved credits on 2009 tax returns have cost the state about $3.3 million, and many claims are still pending, the tax commission said.
Last year, the state credit of 50 percent of the purchase price, combined with a $7,500 federal tax credit, caused a buying frenzy with dealers advertising models of low-speed electric vehicles for as little as $1,000 or less after factoring in the credits.
Sales tempered after the Oklahoma Tax Commission announced only certain models would qualify for the credit.
Roger Gaddis, owner of Ada Electric Cars, along with several other dealers is suing the Tax Commission over their handling of the credits. He said he invested a lot in his business and now is stuck with hundreds of thousands of dollars worth of unsold inventory.
“We’ve sold almost no cars since Jan. 1,” he said. Some customers blame him, he added, even though the Tomberlin models he mainly sold were first approved for the credit, then later disqualified. The lawsuit, filed in December in Oklahoma County District Court, is ongoing.
