If you are over the income limits (150/300k) of the new bill and haven't gotten your truck....

[hturnerfamily]

I believe an Order DEPOSIT should clearly be acceptable as any 'binding contract' that the 'new' bill might be referring to, even if you think that anything that happens before 1/1/23 would even be affected by this 'new' bill. They are not going to 'back track' and take away provisions from a previous bill that have already been relied on for current purchases, and ORDERS. We, as tax payers, can't control how long it takes for a vehicle to be produced. We ORDERED in good faith, expecting a product to be delivered that the current laws of the time have precedent over.

Are there some of us who might NOT receive our vehicle before 12/31/22? Yes, especially if you are just now being allowed to order a 2023 model, but any of those folks ALREADY have information about this 'new' bill, and are not able to then claim that it shouldn't affect them. The rest of us who've reserved and ORDERED a vehicle before this bill was even brought to light should not have any concerns.

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[cvalue13]

The Transitional Rule (quoted on the first page by OP) is explicit that any EVs purchased after the bill is signed into law will fall under the new rules.

in the case of a taxpayer that—
(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle

People can debate which parts go into effect when, but I can't find a basis for believing anyone can opt for the old tax rules if they take delivery before 12/31/2022 without a binding contract.

Hmmm. Perhaps so, though that interpretation would have an extra odd effect:

On one hand, your read of the transition rule would conclude that the availability of the current bill terminates for anyone who hasn’t already taken delivery or received a binding contract.

On the other hand, the new bill is clear that it doesn’t take effect until after 12/31/22.
“EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graphs (2), (3), (4), and (5), the amendments made by this section shall apply to vehicles placed in service after December 31, 2022.”

Combined, then, this interpretation means there is no applicable tax incentive for EVs between the date of enactment (Biden signing), and the bill’s effective date (Jan 1 23).

If that’s the case, the effect for this forum is: anyone (who didn’t already have a binding contract) that takes delivery between Biden signing and Jan 1 23 will have no available EV tax credit (neither the old bill or the new one), regardless of vehicle price, manufacturing location, etc.

I did find one article, from Green Car Reports that suggests just this reading of the bill: “ZETA, a policy and advocacy group representing electric vehicle makers, charging networks, hardware suppliers, battery makers, utilities, and all the industries making and supporting EVs, doesn't see this as a quick turnaround. Based on its reading of the bill and conversations with administrators, it does not expect the EV tax credit to be available for the average consumer until 2023, it confirmed to Green Car Reports Thursday. The group estimates that the timeline of the bill on the way to the President’s desk buys shoppers about two weeks from today. The tax credit goes away for the rest of the year—probably. Contrary to what’s been reported elsewhere, there is no special provision to retroactively apply to electric vehicle purchasers for the rest of 2022.”

Personally, that’s not how I’d read the transition rule, for several reasons of interpretation but just by example:

The act is clear that the North American manufacturing provision (the item “(2)” exception referenced in the effective date clause above) which is moot for Ford (it’s potentially not moot for, eg, Fisker), goes into effect at the bill’s signing: “(2) FINAL ASSEMBLY.—The amendments made by subsection (b) shall apply to vehicles sold after the date of enactment of this Act.” Meanwhile, the per-vehicle dollar limitations (item ‘(3)’ exception referenced in the effective date clause above) are clear those provisions don’t go into effect until after the Secretary releases it’s guidance, which has an outside date of 12/31/22: “PER VEHICLE DOLLAR LIMITATION AND RE-LATED REQUIREMENTS The amendments made by subsections (a) and (e) shall apply to vehicles placed in service after the date on which the proposed guidance described in paragraph (3)(B) of section 30D(e) of the Internal Revenue Code of 1986 (as added by subsection (e)) is issued by the Secretary of the Treasury (or the Secretary’s delegate).” Meanwhile, the bill is clear that the 200K limit in the present bill (item ‘(5)’ exception in referenced in the effective date clause) doesn’t go away until 12/31/22: “(5) ELIMINATION OF MANUFACTURER LIMITATION.—The amendment made by subsection (d) shall apply to vehicles sold after December 31, 2022.”

So then, if the revised bill’s intent was to make inapplicable to all purchasers the prior bill’s terms from and after the president’s execution (unless they had a binding contract), but to not have the new bill in effect until Jan 1 23, it’s rather odd to in the same article if the bill go to great lengths to state, eg, that the NA manufacturing limit goes into effect at the president’s signing (wouldn’t matter unless some credit is available in this period) and that the 200k limit remainsin effect until Jan 1 23 (wouldn’t matter unless the prior bill’s terms are still available until Jan 1 23).

But, I’ve got to get packed and leave to go to the beach for 10 days - best of luck to all

 

[FordLightningMan]

I think it's best to assume the worst. cvalue13's post is a perfect example of how this could go entirely wrong. I really hope everyone can point their fingers at me and laugh and said I was overreacting, I will gladly accept being ridiculed while pocketing $7,500. But I'm not going to make any plans for that $7,500 now or until February of next year.

For a relevant example of how bad my luck is, NY State had a $2,000 EV rebate for all EVs sold. It was put in place in 2017 and then in 2021 they changed the rule mid-year that any EV over $40k would only get $500. My Tesla missed the cutoff by a few days and my rebate was cut by $1,500. Don't tell me these things can't happen mid-year.

 

[Tyler Durden]

The transition rule...

Let's assume Biden signs the IRA into law on 8/19/2022, and that I want to buy a Kia Soul EV, which is built in South Korea.

Scenario 1: on 8/15/2022, I go to a Kia dealer, test drive a Kia Soul EV, and want buy it. BUT, they don't have the color I want. "No problem," the dealer tells me, "I'll order that for you, you'll get it in about two months, just sign this IRS-approved binding purchase agreement (whatever that ends up being) and give me a $100 deposit (probably non-refundable just because)". Sure enough, I return to the dealer on 10/15/2022, close the deal, and drive off with my Kia Soul EV.

Scenario 2: I troll the dealer's website and wait until the color I want shows up in his inventory. It does on 10/15/2022 so I show up at the dealer's lot, close the deal then, and drive off with my beloved Kia Soul EV.

Scenario 1: I get the full $7500 credit
Scenario 2: I get no credit

I still maintain that the transition rule is only meant to protect anyone with a binding purchase agreement that would otherwise be screwed by the exceptions listed in Section 13401 (k) (2)-(5), none of which appear to affect any F150L delivered in 2022.

I respect anyone taking Pascal's Wager and getting a binding puchase agreement. I only may be affected by the possible forthcoming guidance on MSRP, but I can fix that if needed at the dealer, I'm only floor-mats away from under $80k.

 

[PiMatrix]

This thread should be renamed to (If your MSRP is over the 80k limit).

My XLT has a MSRP of 58k, so no issue with vehicle price exceeding the new limit.

We are, however over the new bill's 300k household income limit. From everything I can read, there is little to no risk of not qualifying for the existing $7500 tax credit. The income limit will not be applied until Jan 1 2023. Not going to bother contacting my dealer either. Worried it would only give them the opportunity to start playing ADM/add-on games.

The bill may get stuck in the courts! I hate politics!

GOP plans effort to sabotage Inflation Reduction Act
House Republicans are planning to try to open up Democrats' $740 billion tax, climate and health care bill to a legal challenge after it passes, Axios has learned.

Why it matters: The move is Republicans' way of showing their base that they're going to great lengths to kill the legislation, which is likely to be unanimously opposed by House Republicans.

• "I would be shocked if anybody [in the GOP] voted for it," said Rep. Drew Ferguson (R-Ga.), the House Republican chief deputy whip.

Driving the news: Republicans, led by members of the right-wing House Freedom Caucus, plan to get "as many members as possible to vote by proxy" in order to deny Democrats a physical quorum, two senior Republican aides told Axios.

• The bill would still pass, but Republicans hope a company affected by the tax provisions in the bill will then sue to challenge the law's constitutionality.
• Fueling their plan is the fact that so many members are voting by proxy: there were 187 active proxy letters as of Friday afternoon, according to the House Clerk's office.

Context: The Constitution requires Congress to have a simple majority of its members present to pass legislation — in other words, a quorum.

• However, the House passed a resolution at the start of the 117th Congress that stipulates proxy votes count towards that quorum.

Flashback: The Supreme Court in January declined to hear a challenge to proxy voting brought by House Minority Leader Kevin McCarthy (R-Calif.), leaving in place a lower court ruling that the House's ability to make its own rules under the Constitution's speech or debate clause is not subject to judicial review.

• However, one of the aides noted that a court has not weighed in on whether proxy votes count towards a quorum under the Constitution — buoying their hope that the matter could at least be adjudicated in court.

 

[Cypress]

Decent article on the subject:

https://www.msn.com/en-us/money/new...A10ADK1?cvid=b7014239d46f4bacbab1350da0810af2

 

[cvalue13]

I think it's best to assume the worst. cvalue13's post is a perfect example of how this could go entirely wrong. I really hope everyone can point their fingers at me and laugh and said I was overreacting, I will gladly accept being ridiculed while pocketing $7,500. But I'm not going to make any plans for that $7,500 now or until February of next year.

For a relevant example of how bad my luck is, NY State had a $2,000 EV rebate for all EVs sold. It was put in place in 2017 and then in 2021 they changed the rule mid-year that any EV over $40k would only get $500. My Tesla missed the cutoff by a few days and my rebate was cut by $1,500. Don't tell me these things can't happen mid-year.

Went into this in another thread, but your post has me reposting here as well in order to clarify that my post above was both (1) as always, not tax/legal advice and (2) pointing out how a certain reading of the bill (to me) makes no sense.

let me further clarify so as not to leave that confusion lingering - again, just my personal read of the bill below, YMMV

“
I think you’re absolutely correct here (caveats reemphasized) [that there is no repeal panguage], and since brevity in this forum appears to only attract ire, I’ll add to your point with some moar wurds

Those reporting that *gap-theory* (let’s call it) [that upon signing everyone needs a binding purchase order for the remainder of 2022] focus on the “transition“ provision in the bill, read alone, which says:

“
(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—

(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in
5 section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and

(2) placed such vehicle in service on or after the date of enactment of this Act,

such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.”

However, reading this provision alone *I think* ignores not only the fact that as you point out there’s no language repealing the current law sooner, but also ignoring the immediately-prior Effective Date provision, which is clear that this new bill - including the “Transition” language - does not become effective until 1/1/23:

(k) EFFECTIVE DATES.—

(1) IN GENERAL.—Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by this section shall apply to vehicles placed in service after December 31, 2022.”

The above-listed carve-outs in (2)-(5) do not include the “transition rule,” so such transition rule Itself does not appear effective until 1/1/23.

And, as you alluded to, the carve-outs in (2)-(5) do individually have effective dates that roll-on prior to 1/1/23 - replacing or adding to the law in place today. Which would be a rather odd thing to do - that is, replacing or adding to a law in place today - if the law wasn’t in still place today.

So to me, this *gap theory* (that when the president signs there’s no longer an EV credit at all until 1/1/23) is pretty nonsensical and derives only from not reading the effective date of the bills language.

What does make sense of the “Transition” language instead, is:

As of 1/1/23 and thereafter, those filing their taxes that both (A) took delivery before 1/1/23, and (B) wouldotherwise be excluded by the few new provisions that go into effect before 1/1/23 (eg don’t satisfy the North American manufacturing requirement), can elect to apply the “prior” language of the law.

But conversely, those who (A) took delivery before 1/1/23, but (B) were not otherwise excluded by the few new provisions (eg satisfy the NA manufacturing req), took delivery before the remaining new language was effective, and so they need no “transition” treatment.

By way of example: Fiskars delivered after the bill is signed into law do need transition treatment immediately in 2022 tax year (because the NA manufacturing restriction goes into effect at the bill’s signing); but F150L’s do not need transition treatment because before 1/1/23 no language applies to the F150L that is yet effective*

The purportd *gap theory* doesn’t read the entire bill’s language, sees immediate repeal language where none exists, and also creates apparent internal conflicts to the bill’s effective date/transition rule language. The alternative, (I think) better read, considers the entire language of the bill, leaves no internal conflicts to the bill’s effective date/transition rule language, and makes sense on thfacts.

** note that it seems one other limitations may or may not apply to the F150L if and only upon the Secretary providing its interpretive guidance due on or before 12/31/22, but there’s no good crystal ball for that just yet; namely, those provisions that theoretically could go into effect before 1/1/23 upon issuance by the Secretary appear to only relate to the battery mineral/component breakout of the credit, which under the new bill would have the max $7,500 broken into two equal component values for satisfying either or both of the minerals/assemblage features of the battery manufacturing limitations. Some believe the Secretary won’t release this guidance until at least 12/31/22, which if true makes this possibility moot. If the Secretary did release the guidance beforehand, however, I personally have zero clue the degree to which the F150L batteries satisfy either of the battery’s manufacturing requirements - which I suspect is exactly what the Secretary is being given time to do: “interpret” the rules considering details submitted by the manufacturers?”

 

[bryan995]

So the bill was just signed, No ?

My truck just arrived but has not been inspected / released yet. I am over the new income limits.

Should I be pushing for a signed option contract tonight ? What’s the read.

 

[jefro]

Too late for future owners. You should get it under old rules.

 

[cvalue13]

I am over the new income limits.

Check with your tax professional, but:

all serious analyses of the bill agree that the only material provision that went into effect at signing is the North American manufacturing requirement (with the MSRP/income caps not going into effect until 1/1/23)

separately, even were the “Transition Rule” requiring a “binding” agreement applicable to your vehicle (if you’re taking delivery in 2022, it’s almost certainly not applicable), that “Transition Rule” required having such “binding” agreement before the bill was signed.


If you need some comfort in this, note for example the guidance the NADA sent out to all dealers in its network:

 

[jb56]

Apparently the legislature just wants households with income over $300,000 to buy super-duty trucks instead. Instead of a Lightning and a Tesla model Y, we'll just get an F350 and a Bronco.

 

[cvalue13]

Apparently the legislature just wants households with income over $300,000 to buy super-duty trucks instead. Instead of a Lightning and a Tesla model Y, we'll just get an F350 and a Bronco.

dont forget to be pulling your HCB center console fishing yacht

 

[Lucky EV]

So the bill was just signed, No ?

My truck just arrived by has not been inspected / released yet. I am over the new income limits.

Should I be pushing for a signed option contract tonight ? What’s the read.

You should be all set to take the credit under the old law, as expected the only provision that takes effect today is the made in NA rule…until 12/31/22.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

 

[GrokTime]

Great find! Thank you. That pretty much puts the issue to rest.

 

[cvalue13]

You should be all set to take the credit under the old law, as expected the only provision that takes effect today is the made in NA rule…until 12/31/22.

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

While I’ve glanced at this first guidance for only a moment, my first impression is that it is possible many of the “binding” contracts folks *attempted* may not be viewed as “binding” in the eyes of the IRS:

“In general, a written contract is binding if it is enforceable under State law and does not limit damages to a specified amount (for example, by use of a liquidated damages provision or the forfeiture of a deposit). While the enforceability of a contract under State law is a facts-and-circumstances determination to be made under relevant State law, if a customer has made a significant non-refundable deposit or down payment, it is an indication of a binding contract. For tax purposes in general, a contract provision that limits damages to an amount equal to at least 5 percent of the total contract price is not treated as limiting damages to a specified amount. For example, if a customer has made a non-refundable deposit or down payment of 5 percent of the total contract price, it is an indication of a binding contract. A contract is binding even if subject to a condition, as long as the condition is not within the control of either party. A contract will continue to be binding if the parties make insubstantial changes in its terms and conditions.”

Headed to the beach for an evening drive, but will look at this and a few of the “form” agreements the likes of Fisker and Rivian were offering to their customers, and think on it a bit more.

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