Obama Administration Proposes Raised Tax Cap for Alternative Fuel Vehicles
The proposals, put forward as part of this year’s budget, are the latest tax breaks suggested to help reach the administration’s goal of putting one million advanced technology vehicles on United States roads by 2015.
Tax credits already exist for buyers of electric vehicles, provided they meet minimum requirements for speed, emissions standards and battery power output, are designed for use on public roads and can be recharged from an external source.
These start at $2,500, with $417 added per kilowatt hour of battery power output over the four kilowatt hour minimum, with credits capped $7,500. The money is awarded to the taxpayer putting the vehicle into service or to the seller if it is being sold to a tax-exempt company or government agency.
If the proposals are approved, this would be scalable up to a maximum of $10,000 and restructured to include vehicles which use more than one power source, provided they get most of their energy from alternative fuels, including electricity.
To qualify, these must exceed their footprint-based MPG target by an equivalent 25% or more, with the most frugral vehicles getting the biggest credit. Vehicles registered in 2017 will be eligible for 75% of the proposed credit, falling to 50% in 2018 and 25% in 2019 before they are removed altogether on the 1st January 2020.For more of the latest industry news, click here.