- LiFe FSV
- Whip LSV
by Pamela Coyle for sunpluggers.com, May 20, 2010
Maryland hopped aboard the electric vehicle incentive bus Thursday, giving buyers of electric vehicles a $2,000 tax credit and granting electric vehicle drivers use of commuter lanes regardless of their passenger count.
The state joins a growing list of others that hope state tax breaks – on top of a federal tax credit of up to $7,500 – will entice consumers as the U.S. electric vehicle industry ramps up.
Maryland is especially significant for Chevrolet, which has targeted three key markets – Washington, D.C., California and Michigan – for early sales of the Volt.
“Incentives for any new technology are important whether it is a dollar amount or something like HOV access,” said Kaerry Christopher, director of Washington, D.C., communications for General Motors, maker of the Volt. “It is the type of incentive that encourages all the type of things that lead to a green economy.”
Maryland Gov. Martin O’Malley signed the two bills Thursday. The legislation grants a $2,000 excise motor vehicle tax credit for the purchase of a plug-in electric vehicle. It applies to vehicles purchased between Oct. 1, 2010, and July 1, 2013. The second measure grants electric vehicles access to high occupancy vehicle (HOV) lanes regardless of the number of passengers, starting Oct. 1 and lasting three years.
Mr. O’Malley said the incentives are part of Maryland’s plan to create 100,000 new green jobs over the next several years. “This important tax credit not only helps promote the use of cleaner, more energy-efficient vehicles throughout our state to help our environment, but it’s an important economic development tool as well,” he said in a prepared statement.
Volt production begins later this year, as does production of the Nissan Leaf. California, with its generous $5,000 state tax credit for electric vehicle purchases, is a target market for both companies. The Leaf also will roll out in markets in Oregon, Tennessee, Washington state and the Phoenix/Tucson area of Arizona.
Washington exempts electric vehicles and those with hybrid technology that get at least 40 miles per gallon from state sales tax. The exemptions also apply to charging equipment and service. Oregon on Jan. 1, 2010, eliminated a $1,500 tax credit for the purchase of new gasoline-electric hybrids, though the credit remains available for electric vehicles.
Tennessee, where production of the Leaf is scheduled to start in 2012 at Nissan’s revamped plant in Smyrna, south of Nashville, does not exempt electric vehicles or hybrids from sales tax. An effort to pass such an exemption last year did not make it through the legislature. Nor does the state offer any tax credits to buyers. Tennessee has no state income tax, though it does tax capital gains.
A Lesson Learned
Across the country, state incentives vary widely, and lawmakers should look to Oklahoma for a lesson in how to more carefully craft their intentions. More than a decade ago, Oklahoma passed a law that gave buyers a tax credit of up to 50 percent off the price of an electric vehicle. The problem? Under broad language, electric golf carts and go-carts qualified.
Last September, the Oklahoma Tax Commission passed an emergency rule to clarify matters: “The exclusion includes vehicles that have a body configuration more akin to that of a typical golf cart or go-cart rather than a traditional passenger automobile and vehicles that are principally designed and manufactured for sporting or recreational purposes.”
But it just wasn’t that easy. Ada Electric Cars worried that their boxy little things looked too much like golf carts even though they have seatbelts, trunks and VIN numbers, and it sued the state. A judge ruled in favor of the company, but the Oklahoma Supreme Court in December ruled the lower court did not have jurisdiction, which kept the Tax Commission’s emergency rule intact.
Now, the state has to decide model by model.
As of May 13, Oklahoma had not decided on the Ada Electric Car but had ruled that the ZAP Xebra Pickup Truck, ZAP XL and ZAP Van Shuttle qualified. The Tesla models, not surprisingly, are good to go as well.
The 2010 Wheego Whip, a low-speed two-seater, got the green light but the company has put plans for a manufacturing plant in Oklahoma on hold until it gets more reassurance. Wheego, based in Atlanta, had picked Oklahoma because the state had the highest number of sales in 2009. The Wheego LiFe, a higher-speed model, is set to debut in August.
Multiple models of American Custom Golf Cars and Bad Boy Buggies did not make the cut. For a complete list by manufacturer, please click here.
Incentives aim to change consumer behavior, and GM’s Christopher remembers noting a large number of Toyota Prius hybrids on the road after he moved to Virginia. Virginia is among several states that exempt hybrids and electric cars from HOV restrictions. “That can save a half-hour each way for people commuting to D.C.,” he said.
Colorado as well as parts of New York and New Jersey also allow unlimited HOV access. Tax credits for the purchase of new electric vehicles range from $5,000 in Georgia as well as California to as much as $4,500 in Hawaii, $4,000 in Illinois, $2,500 in Utah and $2,000 in Iowa.