Current law says that consumers who buy or lease a vehicle with a battery capacity of at least four kilowatt-hours qualify for a tax credit of between $2,500 and $7,500. Gasoline-electric hybrids that don't require charging are not eligible. The credits are available on the first 200,000 electric vehicles a manufacturer sells. Once a company reaches that threshold, the $7,500 credit continues through the end of that calendar quarter. Then it is reduced by 50 percent every six months until it phases out completely. As part of tax reform negotiations, lawmakers debated whether to scrap the electric vehicle tax credit.
On December 20, 2017, the Senate voted 51-48 to approve sweeping tax reform legislation known as the Tax Cuts and Jobs Act. The $1.5 trillion tax bill, which makes deep and permanent cuts to corporate taxes and temporarily lowers individual taxes, was signed by the president just prior to Christmas. Included in the final bill is the tax credit for electric vehicles. Many automakers were pleased to hear that the electric vehicle tax credit had escaped the chopping block.
"We support any kind of incentive that could convince consumers to purchase electric vehicles," said Gloria Bergquist, Vice President of the Alliance of Automobile Manufacturers, the industry's chief lobbying group. Following passage of the bill, General Motors issued a statement saying it was pleased the EV credit would be upheld. CALSTART, a nonprofit representing 175 companies working on some aspects of electric vehicle technology, also lobbied to keep the incentive.
"The credit protects U.S. job creation and leadership in the electric vehicle sector," CALSTART said in a statement.
The tax reform legislation passed by the House and Senate on December 20, 2017, includes a provision that increases the depreciation limitations under the Internal Revenue Code (280F) that apply to automobiles. For passenger automobiles placed in service after December 31, 2017, and for which the additional first-year depreciation deduction under section 168(k) is not claimed, the maximum amount of allowable depreciation is $10,000 for the year in which the vehicle is placed in service; $16,000 for the second year; $9,600 for the third year; and $5,760 for the fourth and later years in the recovery period. The limitations are indexed for inflation for passenger automobiles placed in service after 2018.
More than 300 organizations representing users, retailers, customers, fleet managers (including NAFA), utilities, and producers of clean alternative fuels, including natural gas and propane, circulated a letter on Capitol Hill urging Congress to reinstate the alternative fuels tax credit (AFTC) before leaving town for 2017 The AFTC is a credit of $0.50 per gasoline gallon equivalent (GGE) of certain transportation fuels, including natural gas, liquefied petroleum gas, P Series Fuels, liquefied hydrogen, and others. The credit expired at the end of 2016.
Specifically, the letter asks Congress to extend the AFTC for two years, highlighting the business planning benefits, and notes that a full five-year extension would provide business certainty combined with a significant contribution to America’s economic growth.
On December 20, 2017, Senate Republicans introduced what’s commonly referred to as "tax extenders" legislation, which includes language to extend the AFTC; as well as the $1.00 per gallon tax credit for biodiesel; and the 30 percent alternative fuel infrastructure tax credit, all of which NAFA supports. As of this writing, it is unknown at this time when this package was taken up by the full Senate and House or of the final result for AFTC reinstatement.
The U.S. Federal Motor Carrier Safety Administration’s (FMCSA) Our Roads, Our Safety partnership, of which NAFA is an official partner, has released a new short video that depicts the long stopping distances that trucks and buses face, and provides tips on how passenger vehicle drivers can safely operate around these large vehicles. The video, the third to be issued by the Partnership to date, is available to view here.
The FMCSA launched the Our Roads, Our Safety partnership in 2016 to help raise awareness among the general driving public about operating safely around and sharing the road with large trucks and buses. As part of the program, FMCSA has developed social media content, video and radio spots, safety tip sheets, postcards, infographics, brochures, and more aimed at educating passenger vehicle drivers, truck drivers, cyclists, and pedestrians about the operational challenges large trucks and buses face in order to make the safest decisions while on the road.
NAFA joined the American Trucking Associations (ATA), the American Bus Association, AAA, and the American Driver and Traffic Safety Education Association to become an official partner in September 2017. As part of this effort, NAFA participates in a series of monthly partner meetings to share ideas about safety and how best to disseminate the campaign’s critical road safety messages. To learn more about the Our Roads, Our Safety program, click here.
NAFA Fleet Management Association
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