SB 8 ELECTRIC VEHICLE TAX CREDIT

Sen Bill Tallman

Actions: [1] SCC/STBTC/SFC-SCC-germane-STBTC

Scheduled: Not Scheduled

 Senate Bill 8 (SB 8) creates the Electric Vehicle and Charging Unit Income Tax Credits. SB 8 increases registration fees for electric cars and allocates the additional registration fee to state and local road funds.

 

 Senate Bill 8 (SB 8) creates two credits: Electric Vehicle (EV) Income Tax Credit (EV credit) and EV Charging Units Tax Credit (EVCU credit).

EVs purchased or leased for at least three years with a base price of $55,000 or less will be eligible for a $3,250 credit. The aggregate total of the EV credit is capped at $10 million per year. If the aggregate cap is met, taxpayers with eligibility certificates issued by the Energy, Minerals, and Natural Resources Department can claim the credit in the next taxable year in which the cap has not been exceeded. 

The EVCU credit is in the lesser amount of $300 or the cost of purchase and installation. The aggregate total of the EVCU credit is capped at $1 million annually. If the aggregate cap is met, taxpayers with eligibility certificates issued by the Energy, Minerals, and Natural Resources Department can claim the credit in the next taxable year in which the cap has not been exceeded. 

If the credits created by SB 8 exceed the taxpayers’ liability the excess is not refundable.

Taxation and Revenue Department will compile and present an annual report with a cost analysis of the credit to relevant committees.

SB 8 imposes and extra registration fee of $120 for EVs and $60 for plug-in hybrid vehicles. Of the additional fees collected, 77% will be deposited to the State Road Fund and 23% to the Transportation Project Fund also known as the local road fund.

The credits are effective beginning 2024 and have a delayed repeal date of January 1, 2029. The additional registration fees are effective beginning in 2025.