Tax News Update - 5th Edition
Automakers Ask U.S. Government to Lift Cap on Electric Vehicle Tax Credit
Ford, General Motors, Stellantis, and Toyota North America have collectively asked the U.S. government to expand the $7,500 federal tax credit for electric vehicles. Under current law, only 200,000 vehicles per company qualify for the tax credit.
The tax credit was passed in 2008 to give automakers a price cushion as they began to sell electric vehicles for the first time. Once an automaker reached sales of 200,000 electric vehicles, the hope was the companies would have reached a certain economies of scale.
According to the Car and Driver article, this plan is working at least in several situations. For example, General Motors ran out of electric vehicle tax credits in 2019 and recently published prices for their 2023 Bolt that were around $6,000 less than 2022 prices.
Automakers say an extension of the 200,000 limit would provide more time to reach economies of scale, as the companies have collectively pledged to spend $170 billion through 2030 to make electric vehicles more affordable in the U.S.
Proposed Tax Legislation
The following is an overview of several recent tax proposals discussed or introduced in Congress over the past several weeks. It is important that you not treat these proposals as passed legislation. Many hurdles remain before any of these legislative ideas become law. In the meantime, it is useful to see what types of tax laws may be affecting you in the future.
Healthy Homes Act (House of Representatives Bill 7990): This bill, introduced June 8, proposes to amend the Internal Revenue Code of 1986 to temporarily expand the low-income housing tax credit for healthcare-oriented housing.
Clean Competition Act (Senate Bill 4355): This bill, introduced June 7, proposes to amend the Internal Revenue Code of 1986 to create a carbon border adjustment based on carbon intensity.
Firearm Training and Proficiency Act (House of Representatives Bill 7973): This bill, introduced June 7, proposes to amend the Internal Revenue Code of 1986 to provide an above-the-line deduction for the purchase of gun safes, gun safety devices, and gun safety courses.
The above are proposals. There are many steps each bill must go through before they are signed into law. Information retrieved from: GovTrack.us https://www.govtrack.us/congress/bills/subjects/taxation/6342