This is the sixth in a series of articles designed to bring customers up to speed on Capitol Hill's thinking on planned tax changes so they can prepare accordingly. This digs into two Senate legislation that will eliminate electric vehicle (EV) incentives.
Article Highlights:Senator John Barrasso (R-WY) has presented the Eliminating Lavish Incentives to Electric (ELITE) Vehicles Act (Senate Bill 541), which proposes eliminating the $7,500 tax credit for new EVs and the $4,000 credit for older ones. Furthermore, the proposal wants to eliminate the federal investment tax credit for individuals who build EV charging stations.
Senate Majority Leader John Thune, along with 13 other Republican senators, support the proposal. It has also received support from organizations like the American Fuel & Petrochemical Manufacturers, the National Taxpayers Union, and Americans for Prosperity.
Senator Deb Fischer (R-NE) has presented legislation known as the Fair Sharing of Highways and Roads for Electric Vehicles (Fair SHARE) Act. This measure would compel electric vehicle (EV) owners to pay to the Highway Trust Fund (HTF), which is critical for supporting road and bridge repair and is now financed mostly by a federal tax on gasoline and diesel fuel. It proposes a one-time $1,000 fee on the purchase of electric vehicles.
Currently, EV owners do not contribute to the HTF since they do not pay the federal fuel tax that funds the fund.
Senator Fischer said that "EVs can weigh up to three times as much as gas-powered cars, creating more wear and tear on our roads and bridges." "It's only fair that they pay into the Highway Trust Fund just like [owners of] other cars do." Hybrid cars will be exempt from the new tax.
Senators Cynthia Lummis (R-WY) and Pete Ricketts (R-NE) are among the bill's co-sponsors, and numerous trade bodies, including the American Society of Civil Engineers, American Road and Transportation Builders Association, and the American Trucking Association, endorse it.ALERT: The EV credits will expire 30 days after President Trump signs the measure into law, and the $1,000 tax would apply to transactions made after December 31, 2025.We will have to wait and watch how these proposals go in Congress.
Stay tuned!