Home » World News » Biden admin quietly adds workaround, making pricey sports cars eligible for EV tax credits
Biden admin quietly adds workaround, making pricey sports cars eligible for EV tax credits
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The Biden administration issued guidance Thursday explaining which electric vehicles (EV) qualify for tax credits and included a workaround that allows a wide range of cars to be eligible.
The Department of the Treasury said in its announcement that under the Inflation Reduction Act (IRA), which President Biden signed into law in August, regular consumer EVs would qualify for the commercial clean vehicles credit of $7,500 if leased instead of purchased. The workaround allows dealers or businesses that lease cars to collect the credit on leased EVs that, if purchased, would not be eligible for the tax break.
"In providing today’s guidance, Treasury is simply following the tax laws and the IRA as written," a Treasury Department spokesperson told FOX Business on Thursday evening. "The tax laws governing ownership in a lease situation and what is a legitimate business use — and therefore what would fall under the 45W credit for commercial vehicles purchased for use or lease — are longstanding, settled, and clear."
According to the Treasury Department, a "qualified commercial clean vehicle" is a vehicle made by a qualified maker, acquired for use or lease by a taxpayer and is "propelled to a significant extent" by an electric motor powered by a battery. Any leased EV that falls satisfies the broad requirements and is less than 14,000 pounds would be eligible for the $7,500 credit.
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