The government of California (the legislative branch) is currently considering a bill that will potentially reduce the sales tax on “green” cars sold in the state by more than 50%, according to recent reports.
Green cars in this case refers to battery electrics, plug-in hybrids, and hydrogen fuel-cell vehicles. Can’t say I understand the repeated inclusion of hydrogen cars in these sorts of moves — can anyone really, with a straight face, claim that hydrogen cars are green? Or even sensible, in any regard at all?
Anyway… if approved, the bill will see the tax on these vehicles reduced to 3.06%, down from 7.5% where it stands now — a big cut. I don’t really agree with many of California’s decisions (many of them are terribly uneconomical), but I think that this is probably a pretty good idea. Probably one of the best approaches out there to supporting electric vehicle (EV) adoption when it comes down to it, now that I’m thinking about. And the health and financial savings that come from EVs warrant it.
It should be noted here that a similar bill was actually introduced back in 2013, and didn’t manage to make it all the way through the process — reportedly over funding concerns, according to the Los Angeles Times.
The reintroduction of the bill is partly due to Governor Jerry Brown’s recently revealed and relatively ambitious emissions targets — as well as an “improved” situation with regard to finances, according to the bill’s author, Democratic Assemblyman Phil Ting.
According to Ting, a good solution could be making up for the revenue shortfall expected by the tax cut via the funds gathered under the state’s cap-and-trade program. While these funds (969 million as of mid February) have already been allocated in the state budget, the point seems to have some merit to it — to my eyes, anyway.
The expected shortfall from the tax cut would be roughly $92 million a year, according to the Los Angeles Times — based on 2014 sales figures, and an average price of ~$35,000 per vehicle. With EV sales in the state continuing to grow, though, the actual figure could end up notably higher than $92 million a year.
Image Credit: California Flag via Flickr CC