Electric Car Dealers, Customers Upset Over Ruling on Oklahoma Tax Credit

The Oklahoma Tax Commission has passed an emergency rule on tax credits for electric vehicles.<BR><BR><A href="http://www.tax.ok.gov/upmin091709.html" target=_blank>Learn more&nbsp;about the&nbsp;electric&nbsp;vehicles that&nbsp;qualify&nbsp;for&nbsp;state&nbsp;tax credits</A>&nbsp;| <A href="http://www.news9.com/global/Story.asp?s=11030782" target=_blank>Electric Cars Giving Electric Charge to Economy</A>

Friday, September 18th 2009, 9:01 pm

By: News 9


By Colleen Chen, NEWS 9

OKLAHOMA CITY -- The Oklahoma Tax Commission has passed an emergency rule on tax credits for electric vehicles.

Before Thursday's rule, electric vehicle sales had gone up in Oklahoma because of a combination of state and federal tax credits. A state law passed 13 years ago gave a tax credit of up to 50 percent off the price of an electric vehicle. Combine that with thousands of dollars in federal tax credits and some electrics vehicles were virtually free.

Paula Ross, who is with the State Tax Commission, said the new ruling simply clarifies the original intent of the law.

"The law was meant to give tax credits for electric cars that would be used on actual roads, not for recreation vehicles like golf carts," Ross said.

The Tax Commission's ruling states:

"The exclusion includes vehicles that have a body configuration more akin to that of a typical golf cart or go-cart rather than a traditional passenger automobile and vehicles that are principally designed and manufactured for sporting or recreational purposes. The fact that a vehicle is 'street legal' is not determinative of qualification for the credit. The capability of incidental road use by a vehicle shall not qualify the vehicle for the credit..."

Learn more about the electric vehicles that qualify for state tax credits

Owners of dealerships like Ada Electric Cars said their cars could be affected by the rule but should not be. Their electric cars are for road use and are low speed vehicles that meet federal vehicle guidelines. Although the cars may look like a golf cart, the cars have seatbelts, trunks, and VIN numbers.

Mike McElroy bought an electric car several months ago because of the tax credits. The idea that he may not get the state tax credit doesn't sit well with him.

"It feels like the state is pulling the rug out from under those of us who bought these vehicles in good faith. I researched it to make sure it would qualify and now it may not. That's wrong," McElroy said.

The tax commission is still working on a list of what vehicles will and will not qualify. The vehicles the tax commission said will qualify so far are Wheego Electric Cars and the Club Car Carryall 2 and Carryall 6 LVSs, which are designed primarily for on-road use. Vehicles that do not qualify for the state tax credit include all Club Car electric vehicles except the Club Car Carryall 2 and Carryall 6 LSVs.

Tax Commission officials said a Club Car is "primarily a manufacturer of recreational vehicles such as golf carts rather than vehicles which are designed primarily for on-road use."

Some new electric vehicle owners are asking for any vehicles bought before the ruling to be grandfathered in and therefore still be eligible for all the credits. The tax commission said at this point, a grandfather clause is not expected. However, any filings that are turned down can be disputed with the Tax Commission.

Ada Electric Cars said they are working with the tax commission to get their vehicles on the eligible list, and are hopeful that will happen.

Meanwhile, electric car customers have been contacting state representatives and the governor's office with complaints.

One lawmaker criticized the tax credits to begin with. 

"This whole issue is nonsense. These cars are restricted to speed limits where you couldn't even get to your local grocery store, so it's completely nuts to incentivize this type of behavior. It makes no sense," said Rep. Mike Reynolds,(R) DISTRICT 91.

However, the tax credits attracted Wheego, an electric car company setting up shop in Oklahoma.

More on News9.com:
Electric Cars Giving Electric Charge to Economy | Oklahoma Company to Sell, Assemble New Electric Cars

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