Federal

Close the Double Subsidy Loophole for Electric Vehicles Act

Source: Congress.gov · 381 words in original text

What This Bill Does

This bill changes how the federal tax credit for electric vehicles works by reducing the credit amount based on state help you receive for buying or owning an electric vehicle. The bill aims to prevent people from receiving both a federal tax credit (a reduction in taxes owed to the U.S. government) and a state subsidy (financial help from your state) for the same vehicle.

Who It Affects

People who buy new plug-in electric drive motor vehicles and claim the federal tax credit. Taxpayers who live in states that offer their own subsidies for electric vehicles.

Key Provisions

• The federal tax credit for electric vehicles will be reduced by the amount of any state subsidy you receive for acquiring or owning the vehicle (Sec. 2(a)). • A "subsidy" includes direct or indirect financial assistance from your state, such as tax credits, tax deductions, grants, loans, rebates, vehicle license tax discounts and vouchers (Sec. 2(b)). • The tax credit will not be reduced below zero, meaning you cannot receive a negative credit (Sec. 2(a)).

What Changes

If this bill becomes law, people who receive money or financial help from their state for an electric vehicle will receive a smaller federal tax credit. For example, if you get a $5,000 state rebate and would normally qualify for a $7,500 federal credit, your federal credit would be reduced to $2,500.

Important Definitions

"Subsidy" means direct or indirect financial assistance from your state including tax credits, tax deductions, grants, loans, rebates, vehicle license tax discounts and vouchers.

Effective Date

The changes apply to vehicles placed in service (registered and ready to use) after the date the bill becomes law.

I 118TH CONGRESS 1ST SESSION H. R. 327 To amend the Internal Revenue Code of 1986 to reduce the tax credit for new qualified plug-in electric drive motor vehicles by State subsidies for these vehicles. IN THE HOUSE OF REPRESENTATIVES JANUARY 12, 2023 Mr. ESTES introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to reduce the tax credit for new qualified plug-in electric drive motor vehicles by State subsidies for these vehicles. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Close the Double Sub- 4 sidy Loophole for Electric Vehicles Act’’. 5 VerDate Sep 11 2014 03:49 Jan 25, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H327.IH H327 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 327 IH SEC. 2. QUALIFIED PLUG-IN ELECTRIC VEHICLE TAX CRED- 1 IT REDUCTION IN CONNECTION WITH STATE 2 SUBSIDY. 3 (a) IN GENERAL.—Subsection (f) of section 30D of 4 the Internal Revenue Code of 1986 is amended by adding 5 at the end the following: 6 ‘‘(12) REDUCTION FOR STATE SUBSIDIES.— 7 ‘‘(A) IN GENERAL.—The amount allowed 8 as a credit under this section (without regard to 9 this paragraph) with respect to a vehicle to 10 which this section applies shall be reduced (but 11 not below zero) by the amount of any subsidy 12 in connection with the acquisition or ownership 13 of the vehicle made available by the State in 14 which such vehicle is registered and placed in 15 service by the taxpayer. 16 ‘‘(B) SUBSIDY.—For purposes of subpara- 17 graph (A), term ‘subsidy’ means direct or indi- 18 rect financial assistance, including tax credits 19 or deductions from taxable income, grants, 20 loans, rebates, vehicle license tax discounts, and 21 vouchers.’’. 22 (b) EFFECTIVE DATE.—The amendment made by 23 subsection (a) shall apply to property placed in service 24 after the date of the enactment of this Act. 25 Æ VerDate Sep 11 2014 03:49 Jan 25, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6301 E:\BILLS\H327.IH H327 kjohnson on DSK79L0C42PROD with BILLS

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