Fiscal Cliff Deal Includes Tax Credit Extension For 2 and 3 Wheel Vehicles
The deal struck Jan. 1 between the House and Senate to avoid the “fiscal cliff,” officially known as the American Taxpayer Relief Act of 2012, has been characterized as a compromise package with no clear victory for either political party.
A genuine beneficiary of the bill, though, is a portion of the alternative fuels and vehicles industries. For example, the purchase of two- and three-wheeled vehicles are eligible for a federal income tax credit.
In the Act was the extension of a tax break originally included in the American Recovery and Reinvestment Act of 2009 that covers up to 10 percent of the vehicles’ cost, capped at $2,500.
One stipulation for the credit is that the two and three wheelers must be capable of reaching at least 45 mph. Electric powertrain motorcycles like those made Zero Motorcycles and Brammo, are prime examples of qualifying vehicles.
Although electric motorcycles are the more recognizable qualifying vehicles, the three-wheeled Alias from Zap Jonway, a joint venture between a California company (Zap) and Chinese vehicle maker Jonway Auto of China, fits the credit, too.
Zap Jonway says the Alias is powered by 32-kilowatt li-ion battery that can be charged with either a 110- or 240-volt charger, taking from four to eight hours to charge. Vehicle specs say the car has a top speed of 85 mph, can seat three, and has range of up to 100 miles on a charge. The National Highway Traffic Safety Administration classifies three-wheelers as motorcycles.
The $38,500 Alias, with two wheels in front, one in back, is still under development according the company’s Web site but customers can reserve online.
Based on dealer feedback, Craig Bramscher, Brammo founder and CEO, said in an interview with Bloomberg that the credit was going to have a positive impact. “We’re ramping up right now to produce more bikes every day,” Bramscher said.
Biofuels also benefit
Sections 404 and 405 of Title IV of the American Taxpayer Relief Act also extend tax credits for producers of cellulosic biofuels, and an extension of incentives for biodiesel and renewable diesel “used as fuel,” until Dec. 31, 2013.
Securing America’s Energy Future (SAFE), a non-partisan advocacy group that seeks to promote decreased dependency on foreign oil, says that the credit and incentive extensions are praiseworthy since algae biofuel plants are already operational, making now the ideal time to support what the group says is a young technology.
SAFE also says that annual tax credit reauthorizations would be more effective on a three to five year schedule in order to allow businesses within the biofuels industry to maximize the value of the credits.