Every Car Related Tax Break Congress Included In New Budget
By Jon Derrickson on March 19, 2018
After deliberation amongst Congress, President Donald Trump finally signed off on a budget that includes a variety of different taxes. But, if you’re a car owner, you may be more concerned about the temporary car-related ta breaks which house themselves within the 652-page budget bill.
The Center for Public Integrity conducted their own investigation into the new budget, to determine whether the 30-odd “tax extenders” were fair. Although, the news outlet referred to them as “tax cut extenders”, as they essentially extend the length of temporary tax cuts.
Moreover, they also suggested that the extenders would be “legislative favors, often slipped into folds of federal bills, notable for funding bigger-ticket items – such as military programs, disaster relief, infrastructure overhauls.” The Center continued to say they usually “benefit narrow special interests that know how to work the system – from race horse owners to StarKist tuna canners to connoisseurs of two-wheeled electric vehicles.”
Anyway, these are some of the car-related tax breaks that have been confirmed:
Starting off, there’s going to be a 10 percent tax credit which cannot exceed $2,500 for two-wheeled electric plug-in vehicles. In addition, those vehicles cannot weight more than 14,000 pounds and must be able to hit more than 45 miles per hour. This tax credit could equate to $500,000 in lost tax revenue. However, it’s only being included for a single year.
The Center stated in their findings –
“Companies that make electric vehicles whose customers could stand to benefit from such tax breaks include Zero Motorcycles, Arcimoto and Polaris Industries. The three all hired Duane Gibson of GovBiz Advantage to lobby Congress, paying his company $225,000 combined in 2017, according to lobbying records. He previously worked in Congress, including a senior counsel to a House Transportation and Infrastructure subcommittee.”
Electric vehicle owners and alternative fuels
Electric vehicles are a huge part of society nowadays, and they’ll only continue to grow as further innovation takes place. But, if you’re an owner of one, you’ll ideally require a charging setup if you want charging to be as efficient as possible. In order to support the evolution of electric cars, Congress introduced a 30 percent tax credit on costs for installing a charging setup, despite it causing a tax revenue loss of $49 million.
The Center highlighted how both Tesla and the Natural Gas Vehicles for America trade group supported the provision; the former invested $740,000 on lobbying and the latter suggested it will enhance investment in alternative fuel trucks.
Luckily for NASCAR, they’ve been granted some assistance to compete with the top outfits in the entertainment business. You see, in recent times, both attendance and television ratings have taken a dip, but the new budget will help with those. Around 1,200 racetracks will have their owed taxes wiped on improvements to facilities. To put that into perspective, track owners will be gifted approximately $13 million.
Alternative fuel sales
Labelled as the ‘Alternative Fuel Excise Tax Credit’, this provision allows an individual to claim 50 cents a gallon on alternative fuels such as natural gas or propane. According to the budget bill, this is only for fuels which were purchased or sold for motor vehicles use last year, but that has caused confusion.
“What constitutes a motor vehicle is not explicitly defined; among the vehicles eligible for the credit are construction forklifts, according to some tax advisers,” the Center said. Even though it’s only been reinstated for a further year, it will deduct around $555 million from the total tax revenue.
Fuel cell vehicles
This section of the automotive industry is still relatively small, and trails behind the progression of the electric market. But, that hasn’t prevented brands such as Hyundai, Toyota and Hondo from committing resources to develop their own hydrogen-powered vehicles. Now, though, they’re getting help from the government with “dollar-for-dollar reductions in a tax bill” for any person that bought a fuel cell vehicle in 2017.
As you can probably guess, this credit is going to aid automakers who endeavour to sell alternative fuel cars massively. The cost of that in terms of revenue? Just a small $4 million. Furthermore, the Center stated –
“The credit is $4,000 for a qualified automobile weighing up to 8,500 pounds and more for heavier vehicles. The three manufacturers were among the groups that lobbied Congress to approve the so-called “tax extender,” which has been in use since 2014, when an existing law expired that had allowed tax credits for fuel cell vehicles purchased between 2006 and 2014.”