EV Tax Credit Expansion Deal Reached by Senate

[Amps]

Manchema strikes again!

They replaced Joe Liebermanchin.

https://www.businessinsider.com/manchin-sinema-carried-interest-biden-deal-2022-7

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[Sdctcher]

It is important to understand what the "Transition Rule" (Page 387 of the proposed law) actually says. It will not apply to anyone who has actually ordered a 2022 Lightning. We all will go under the old law, which gives us up to a $7,500 Tax Credit (Not Rebate) based on Taxes owed for 2022 and with No Limitation on MSRP.

The Key is "Enactment Date" of the proposed new law which is December 31, 2022. Those that had a "Binding Contract" (meaning a Two Party Signed Contract with Money Exchanged) signed on or before the Enactment Date AND the Truck is put into service AFTER the Enactment Date would be affected and therefore allowed the Option of going under EITHER the New or Old law. Not many dealers would complete the sale of your truck prior to being able to hand it over to you, nor not many buyers would pay ahead of time for a promised truck. I certainly would not do it!

This all means that any 2022 trim you get (other than the exceptions above) will give you the Tax Credit but no Rebate. It is the 2023 buyers that will be affected part way into the new model year, but at least they will not need be worried about having to show a tax liability or having Ford run out of credits. It will be the Lariat Buyers who will become confused, especially those who have to start ordering in the next few weeks.

The Transition Rule applies to a very small minority (probably Fleet orders).

The end of the year Enactment Date gives Government and Manufacturers (and Tax Professionals) a planning period.

More worrying is how the government will interpret what constitutes MSRP. Ford includes Destination Fees in their MSRP while many other manufacturers do not. Edmunds defines MSRP as not including Destination Charges while some others include it. GM breaks out some other charges on their window stickers. The government will have to better define what MSRP actually includes before the Enactment Date of December 31, 2022. (Options?; Destination Charges?; Dealer Adds?).

I have read and studied the text of the proposed law, including associated IRS Codes, and I am convinced that I am right about what I am saying. But, if you think I am wrong please give your sources and reasoning.

 

[sotek2345]

It is important to understand what the "Transition Rule" (Page 387 of the proposed law) actually says. It will not apply to anyone who has actually ordered a 2022 Lightning. We all will go under the old law, which gives us up to a $7,500 Tax Credit (Not Rebate) based on Taxes owed for 2022 and with No Limitation on MSRP.

The Key is "Enactment Date" of the proposed new law which is December 31, 2022. Those that had a "Binding Contract" (meaning a Two Party Signed Contract with Money Exchanged) signed on or before the Enactment Date AND the Truck is put into service AFTER the Enactment Date would be affected and therefore allowed the Option of going under EITHER the New or Old law. Not many dealers would complete the sale of your truck prior to being able to hand it over to you, nor not many buyers would pay ahead of time for a promised truck. I certainly would not do it!

This all means that any 2022 trim you get (other than the exceptions above) will give you the Tax Credit but no Rebate. It is the 2023 buyers that will be affected part way into the new model year, but at least they will not need be worried about having to show a tax liability or having Ford run out of credits. It will be the Lariat Buyers who will become confused, especially those who have to start ordering in the next few weeks.

The Transition Rule applies to a very small minority (probably Fleet orders).

The end of the year Enactment Date gives Government and Manufacturers (and Tax Professionals) a planning period.

More worrying is how the government will interpret what constitutes MSRP. Ford includes Destination Fees in their MSRP while many other manufacturers do not. Edmunds defines MSRP as not including Destination Charges while some others include it. GM breaks out some other charges on their window stickers. The government will have to better define what MSRP actually includes before the Enactment Date of December 31, 2022. (Options?; Destination Charges?; Dealer Adds?).

I have read and studied the text of the proposed law, including associated IRS Codes, and I am convinced that I am right about what I am saying. But, if you think I am wrong please give your sources and reasoning.

How sure are you that our orders constitute a "binding contract"? The deposits are refundable. I am not a lawyer, but that doesn't seem very binding too me.

 

[Sdctcher]

I say that our orders Are Not Binding in most cases because we have the right to refuse delivery. I am not an attorney but I would think that takes away the "Binding" thingee.

The point is that very few people need worry about exercising the "Option" that is offered under the "Transition Rule".

I would worry if I were ordering a 2023 Lariat (especially later in the year) that had a price approaching $80K, and I really was counting on that Tax Credit or Rebate. Do I take a chance on whether it will be delivered before December 31st? What Options do I add without blowing through $80K?

 

[Regular150]

It's about loss of control. When people feel like they are losing control they get violent.

Unfortunately ones loss of control result in someones gain of control.

Throughout history centralized control results in some pretty horrific results due to greed and the inherent corruption of the centralized power.

Every major war going back thousands of years is caused by the desire to take idividuals freedom.

Unfortunately most of us in the US still alive have never lived through the Evil that centralized control imparts on people.

It's something we're not familiar with so we think highly of it.

 

[Sdctcher]

Pity the poor guy who orders his 2023 Lightning Lariat in August with options at $80,001.00, the Government decides that figure is the established MSRP at a date after he cannot change his order. If his truck comes before New Years he can take $7,500 off his taxes. If it comes New Year's Day he gets Nothing. So, all Christmas Week he is stressed out because his truck is in route via Slow Rail and he is counting on that $7,500.00 back from the dealer to drive his family on vacation to Wally World. The Lightning shows up on New Year's Day.

Now, he does not just not get his rebate, or have the money to take Moma and the Kiddies to Wally World, he does not have the money to hire a Lawyer to fight the government and prove that he really did have a binding contract with his dealer prior to December 31st.

 

[luebri]

Pity the poor guy who orders his 2023 Lightning Lariat in August with options at $80,001.00, the Government decides that figure is the established MSRP at a date after he cannot change his order. If his truck comes before New Years he can take $7,500 off his taxes. If it comes New Year's Day he gets Nothing. So, all Christmas Week he is stressed out because his truck is in route via Slow Rail and he is counting on that $7,500.00 back from the dealer to drive his family on vacation to Wally World. The Lightning shows up on New Year's Day.

Now, he does not just not get his rebate, or have the money to take Moma and the Kiddies to Wally World, he does not have the money to hire a Lawyer to fight the government and prove that he really did have a binding contract with his dealer prior to December 31st.

Build week 8/15… crossing my fingers I’m not that poor guy!!!

 

[TaxmanHog]

Until this is LAW and I can read the "Revenue Procedures" and "Implementing Regulations" etc....

Anything at this point is speculation at best, some of which is close to target, but none are bulls eye until that time.

It aggravates me to no end when Congress comes up with these hair brained ideas of making something retroactive, there is much work to be done in preparation for how business will implement a sales slip credit vs and filed tax return credit, it's not as simple as folks make it out to be.

 

[fitek]

So, all Christmas Week he is stressed out because his truck is in route via Slow Rail and he is counting on that $7,500.00 back from the dealer to drive his family on vacation to Wally World. The Lightning shows up on New Year's Day.

I once bought my work van in December from halfway across the country (got a smoking deal). They were supposed to deliver it by end of year since I wanted to Section 179 (item must be placed into service in same year as purchase). There were some weather issues. Then delivery driver was two weeks behind (turned out he took the long route so he could get some sun with his wife in Arizona). He got a fix it ticket along the way which somehow he convinced the officer to write out to me. Finally showed up Christmas Eve... with THE WRONG VAN. Some mixup at the dealership. I made him death march back and bring the right van. His wife was livid. I racked up $1k in rental car cost as I sold my other car already.

The gift that kept on giving was the fix it ticket, which I couldn't resolve since it was attached to a vehicle I didn't own. I wasn't going to appear in court on the Arizona-California border, either. Eventually after writing several letters to the black holes that are CA DMV, California Highway Patrol, and the Court, the ticket was dismissed.

 

[drummer]

Looks like Manchin and Schumer have a climate deal in place that includes extending the $7500 EV tax credit and lifting the 200,000 cap. This is great news, but I'm a little concerned with the terms. As currently written, if passed cars that exceed $55,000 and trucks that exceed $80,000 would not qualify. When I purchased my Lariat ER w/Max Tow, I intentionally didn't include any other options to keep the MSRP under $80,000 in case the Build Back Better deal passed. Now Ford has increased the D&D by $100 pushing the MSRP to $80,094.

If the bill passed and became law at some point, would the delivered trucks prior to being signed into law apply to the old requirements? What if the bill is signed into law and then I take delivery? Ford messed this up by adding the extra $100.

I'd argue my build sheet was set at $1695 D&D and not $1795 pushing it over the limit.

Ford messed up? I think setting dollar limits when we are experiencing record inflation is where things went wrong.

 

[world2steven]

More worrying is how the government will interpret what constitutes MSRP. Ford includes Destination Fees in their MSRP while many other manufacturers do not. Edmunds defines MSRP as not including Destination Charges while some others include it. GM breaks out some other charges on their window stickers. The government will have to better define what MSRP actually includes before the Enactment Date of December 31, 2022. (Options?; Destination Charges?; Dealer Adds?).

Seems like any politician with a constituency more than 25 miles away from Detroit would object would object to Destination Charges being included in MSRP.

 

[greenne]

This is a bummer as I've been following reviews of all the EVs out there and Hyundai and Kia seem to be at the top-- kudos to them for totally transforming. I had a '90 Hyundai and it was the worst car I ever owned. I'm all for making s*** in the USA, but, uh, I guess giving GM 7.5k more for each mediocre Bolt EV is winning? Always great when the politicians pick the winners.

My wife got a raise this year and we won't be eligible for the credit anyway. I don't burn money for no reason and w/ our fuel expenses ~$2000/yr, if we can't take delivery this year of an EV w/ the $7500 credit it doesn't make sense to pay more next year... I'm sure a healthy used EV market will form in a few years.

Tbh with the new lower price the Bolt is pretty damn good deal.

If the lower price and tax credit get more people of lesser means into EVs I'm all for it. Not everyone can afford top of line...and 240-260mi range isn't too shabby for $~26-30k(before credit)

 

[GDN]

Pity the poor guy who orders his 2023 Lightning Lariat in August with options at $80,001.00, the Government decides that figure is the established MSRP at a date after he cannot change his order. If his truck comes before New Years he can take $7,500 off his taxes. If it comes New Year's Day he gets Nothing. So, all Christmas Week he is stressed out because his truck is in route via Slow Rail and he is counting on that $7,500.00 back from the dealer to drive his family on vacation to Wally World. The Lightning shows up on New Year's Day.

Now, he does not just not get his rebate, or have the money to take Moma and the Kiddies to Wally World, he does not have the money to hire a Lawyer to fight the government and prove that he really did have a binding contract with his dealer prior to December 31st.

If this passes at least we know now what those weeks will look and feel like. I bought knowing that I would get the $7500 Fed and $2500 TX money, it really helps with the sting of an $80K truck. However, it has been noted before, that if the $7500 is that big a deal to you and you stress over it that much and it causes that much angst, you shouldn't be buying an $80K truck. Everyone wants to live on the edge and push it. Is there no buffer for "what if" or a bad rainy day?

 

[jefro]

I never found a way to get the TX money. It was gone in a flash.
Another forum said they think it is delivery is when the actual sale takes place. An order or sales contract won't be executed until title is issues. So make the deal now, take the truck in 2023 and hope you get some free money.

I bought two EV's without any free money and still happy. Currently the Bolt is an excellent city car. Costs me about $230 a year to charge. It is a good regional car but it is not an interstate cruiser.

I still have a 5.0L F150 and would like to combine the two into one vehicle.

 

[world2steven]

Looks like Manchin and Schumer have a climate deal in place that includes extending the $7500 EV tax credit and lifting the 200,000 cap. This is great news, but I'm a little concerned with the terms. As currently written, if passed cars that exceed $55,000 and trucks that exceed $80,000 would not qualify. ...

It sounds like our legislators need a little time to get this bill right, at least the EV part of it. If they or their staff look at this forum they can come up with a nice list of details. For example, 1. what is included in MSRP? Is MSRP the same as sticker price? 2. do you really deny the entire credit to someone whose truck comes in at $80,001? 3. when have you 'bought' the EV? When you fork over the $500 non-refundable deposit? 4. if you make the law retroactive, do those of us who bought an EV this year have a choice of how we receive a credit? I believe denying the credit that existed when the purchase was made would constitute an ex post facto law (i.e. Congress can't do it)

It would be nice to have these details settled before the end of the year. Some of us are going to have to scramble to come up with enough tax liability to claim the credit under the existing law.

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