California Bill Set To Lower Sales Tax For Plug-in Cars

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All plug-in cars purchased in California may get a bit cheaper if Assembly Bill AB1077 passes. Thanks to Assemblyman Al Muratsuchi’s the proposed bill would reduce the basis for taxes and fees applied to plug-in cars by using the post-incentive transaction valuation for the car, not the pre-incentive sticker price.

Photo Credit: randychiu / / CC BY

The announcement was made in front of Hermosa Beach city hall electric car charging stations with an official press event. It was attended by representatives from Plug-in America, General Motors, Nissan, and Honda, as well as a dozen or more local EV drivers.

If passed, Assembly Bill AB1077 would result in a price drop for buying a plug-in car of between $500 and $1000, depending on the car being purchased.

Right now, in California, plug-in buyers pay the same sales tax (8 percent) as any regular car buyer. Muratsuchi pointed out that purchasers of alternative fuel vehicles currently pay disproportionately high state fees because alternative vehicles cost more than gas-powered vehicles.

A chart he distributed at the press event showed that a Ford Focus EV, at $39,200, is $13,000 more than a conventional Ford Focus. A Toyota Rave 4 EV, at $48,500, is $20,000 more than a gasoline Rav 4.

AB 1077 would reduce the tax basis on the vehicles by about $10,000 each because of the $7,500 federal tax credit and the $2,500 state clean vehicle rebate.

There has been wide support for the bill from buyers, owners, and automakers, but the bill still must travel through both houses before it can become a law. It is scheduled to be heard on May 5th by the Californian Assembly’s Revenue and Tax Committee.

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