Purchasers of plug-in electrified vehicles (PEVs) have equal opportunity to qualify for the $7,500 federal tax credit, but whether one might get $0 to $6,000 in state incentives depends on where a person happens to buy and register the car.
At the extreme this could create a huge disparity between the haves and the have nots.
For example, let’s look at a 50-state-available Nissan Leaf:
Consider someone whose tax situation disqualifies him for the federal credit – and who is doubly unfortunate to live somewhere like Washington, D.C. where purchase incentives equal zip. Barring potential dealer discounts, he can buy the Leaf for its pre-tax MSRP of $29,650.
Now look at someone in a tax filing situation that lets her claim the full $7,500 on her federal return, and she also happens to be so fortunate as to live in Colorado where as much as $6,000 is offered – she can net the same car for $16,150.
Yes, like it or not, life is not fair for the would-be EV buyer. Or maybe it is fair depending on whose perspective you side with.
For their part, the states have the right to set laws to benefit their own residents – you may recall in 1861 “states’ rights” were partially cited as cause for the Civil War – and 150 years later a new kind of inequality persists for EV buyers in that some make out better than others.
We know of no Emancipation Proclamation pending for consumers who ostensibly stand to help America by purchasing an all-electric car – and in cases subsidies apply toward plug-in hybrids.
There are, however, 11 states offering varying degrees of liberation by way of incentives toward purchase ranging from $605 to $6,000 – and more help is on the way.
According to an overview for the National Conference of State Legislatures by Policy Specialist Kristy Hartman, as of July 2013 no less than 94 bills were pending in 20 states that encourage the purchase and use of hybrid and plug-in electric vehicles.
Of the proposed laws, only Massachusetts and New Jersey are considering actual purchase incentives.
Massachusetts’ proposed S.B. 171 would make available a credit for up to $2,500 to purchase a plug-in hybrid or Zero Emissions Vehicle (ZEV), and the state has half a dozen other pieces of alternative-fuel legislation pending.
New Jersey already offers a sales tax exemption for battery or fuel cell-powered Zero Emission Vehicles (ZEV). Beyond this, it’s playing serious catch-up and S.B. 340 is one of 38 proposed alternative-fuel legislation proposals in the state, and would provide a tax credit of $5,000 for the purchase of an EV or $3,000 for a plug-in hybrid.
Aside from providing financial compensation toward a car’s purchase price, states may offer other financial help – available now or in proposed legislation or both.
Of laws in place now, Hartman notes 38 states offer incentives providing exemptions for high-occupancy vehicle lanes, exemptions for vehicle inspections or emissions test, and parking incentives.
The need is perceived by states as we recently saw when eight governors signed a Memorandum of Understanding to push for adoption of California’s ZEV mandates.
Electric vehicles run on energy produced in the U.S. and cars that are propelled by electric motors emit no pollution.
EVs thus help diversify the energy source by which vehicles are fueled and diversity would be good as presently 93-percent of the fuel type used is petroleum and vehicles account for two-thirds of all oil consumed in America.
The states offer a patchwork quilt of benefits – and kidding about inequality aside, the states consider them privileges granted – not rights – for their residents, whether it seems fair or not.
If you would like to see things change, Tesla Motors offers the following suggestion:
“Contact your state or local representative.”
To help you see what the ins and outs are depending on where you live, we put together a list.
We could have called this “Top 10 Plus One,” but here’s how the most EV-friendly states rank by the maximum offered amount – not guaranteed amount – and we’ll add details below.
1. Colorado – $6,000
2. Georgia- $5,000
3. Illinois – $4,000
4. Texas – $3,500*
5. Louisiana – $3,000
6. Pennsylvania – $3,000**
7. California – $2,500***
8. South Carolina – $2,000
9. Oklahoma – $1,500
10. Maryland – $1,000
11. Utah – $605
*Trade-in credit in 16 counties to substitute for old polluting vehicle.
** For first 500 applicants in the Keystone State.
***Can more than double depending on where in California one resides.
Like many states, Colorado actually offers a variety of incentives and programs depending on the type of “alternative fuel.”
As Tesla notes, “Colorado’s Innovative Motor Vehicles Credit offers an income tax credit of up to $6,000 when you purchase a new Tesla.”
Ahem. The tax credit rules also apply when you purchase a new Nissan Leaf, and other qualifying cars.
The state also has sizable potential grants for Electric Vehicle Supply Equipment (EVSE – aka “chargers”) and an EVSE grant fund for municipalities and apartment building owners.
This program allows an income tax credit for 20 percent or up to $5,000 for consumers who either buy or lease a ZEV.
The state also kicks in for EVSE and the utility provider, Georgia Power, offers rate deals.
You can read about the program but the key details are “the amount of the rebate is 10 percent of the base retail price of the vehicle as reflected on the MSRP (“base MSRP”), not including add-on equipment options, up to $4,000.”
And, says Illinois, “At the current time, the only vehicles in which the 10 percent of the base MSRP is used to establish the rebate amount are electric vehicles.”
Illinois also contributes EVSE rebates and plug-in vehicle infrastructure grants, and offers a discounted registration fee.
Here’s a state Tesla can not tell its prospective customers about incentives to buy one of its cars because presently the company is barred from selling without a franchise license.
Some contend Texas’ law is not an actual EV incentive, and that case could be made as it’s limited by counties, and someone needs a vehicle to trade out.
That said, buyers of various EVs and alternative-fueled vehicles in participating counties can be compensated if they want to ditch their 10-year-old or older car or truck or a vehicle that has failed emissions testing.
This page explains the hoops and hurdles, but the short answer is, Texas says, “you may qualify for up to $3,500 towards replacing your vehicle.”
Just don’t ask about a Tesla.
An income tax credit is available in Louisiana for half the cost of converting or purchasing an alternative-fuel vehicle or the tax credit is available for 10 percent of the vehicle’s cost up to $3,000.
If you’re in the Keystone State, you better hurry as the EV benefits are finite.
They were formerly $3,500 in a now-closed program and the new program for 500 first-come, first-served applicants is for $3,000 “for a plug-in hybrid electric vehicle or EV with battery equal to or greater than 10 kilowatt hours.
Buyers of plug-in cars with less than 10-kwh may get $1,000.
You bet your bottom dollar Tesla qualifies in its home state. And, if you live there, depending on where, you may be eligible for much more than $2,500 from the state-wide Clean Vehicle Rebate Project (CVRP) which will be open until funds are exhausted.
Regional-level incentives of various types are also offered in Glendale, Hermosa Beach, Lake Elsinore, Los Angeles’ electric utility, LA’s Department of Water and Power, Northern California here and here, Sacramento here and here, San Diego, San Joaquin Valley, and Santa Monica.
This program ends in tax year 2017 and vehicles with 5 kwh get $667 and buyers may add $111 for each additional kwh up to a cap of $2,000.
For a state known for gas and oil and not as often thought of as a hotspot for EVs, Oklahoma offers an actual plug-in car purchase incentive that Washington and Oregon do not.
Washington state offers several alternative-fuel programs including one that exempts EVs from state sales and use taxes and Oregon also has a menu of credits including for charging equipment, but Oklahoma offers something they don’t.
Oklahoma’s Alternative Vehicle Tax Credit is good through tax years before January 1, 2015.
It is for 10 percent of the vehicle’s cost, up to $1,500.
Better hurry here too, as the deal is from July 1, 2013-July 1, 2014 and involves a tax credit for up to $1,000 against excise tax imposed for the purchase of a qualified plug-in vehicles.
New vehicles including EVs and PHEVs may be eligible for a tax credit of $605.
Utah also offers a tax credit to convert a vehicle to run on propane, natural gas, or electricity. This is for 50 percent or up to $2,500 of the cost.
State programs all vary, and are presented sometimes in legalese which can be complicated.
It may be advisable to research further and consult a tax professional to make sure you don’t assume one thing and get a rude surprise later.
Also, for those who wish to at least get a federal credit and don’t qualify, in some cases value-priced leases roll in the credit to drive down the rate.
As far as we have been able to ascertain, this info is up to date, but it is due to change. If anyone notices updates for the list, please email firstname.lastname@example.org.