California Restores $5,000 Tax Credit for Buying a Fuel-Cell Car

Featured, Policy  /   /  By Bradley Berman

California Gov. Jerry Brown and the state legislature last week approved the allocation of $133 million to continue providing rebates for the purchase of so-called clean energy cars. The program was established in 2009 primarily for battery-electric vehicles—because EVs were hitting the market at the time—but also provides a $5,000 cash rebate for consumer buying or leasing a hydrogen fuel-cell car.

In June, the program ran out of money, forcing the program’s managers to put EV and fuel-cell car buyers on a waiting list. The program was re-instated by state leaders last week. Consumers who were put on the waiting list should now expect to receive checks in November.

Since the program started in 2009 (and as of June 30, 2016), the California Clean Vehicle Program has helped Californians buy 283 fuel-cell vehicles, according to San Diego’s Center for Sustainable Energy, which manages the rebate.

That number breaks down by manufacturer as follows:

  • Toyota – 154
  • Hyundai – 88
  • Mercedes-Benz – 24
  • Honda – 17

This list includes not only the latest generation of hydrogen-powered cars, such as the Toyota Mirai, but also a number of vehicles that have been available on a limited basis for a few years. Meanwhile, the lion’s share of the $35 million or so spent so far by California was provided to consumers buying about 94,000 battery-electric vehicles and 63,000 plug-in hybrids is managed.

The June 2016 suspension of the rebates resulted from concerns about the long-term viability of California’s cap-and-trade program—the source of funding for the rebates. The program is restored, but now limits how much a person can annually earn and still qualify for the rebates: $300,000 for joint filers and $150,000 for buyers who file for taxes as a single person. This new limit is a response to criticism that the clean vehicle rebates were primarily helping wealthy consumers—people who bought expensive electric cars, such as the Tesla Model S.

Hydrogen Car Credits: Federal and State Rundown

While the fuel-cell car market is essentially in its infancy—led by the Toyota Mirai—there is a robust list of incentives that anticipate a steady growth in hydrogen car availability. There is a federal tax credit of up to $8,000, while many states provide additional rebates and other non-monetary incentives, such as preferred parking or use of carpool lanes by solo drivers.

Toyota plans to sell 1,000 units in the United States in 2016, increasing to 3,000 units by the end of 2017. It’s only available in California, although sales are soon expected to expand to states in the US Northeast. Hyundai leases its fuel-cell SUV in California. Honda is expected to introduce the Clarity, a fuel-cell model, later this year.

Information about incentives requires searching through a patchwork of sources. Here’s what we know now—but please notify us if you are aware of other incentives.

Federal
There is a base federal tax credit of $4,000 for fuel-cell cars. The incentive is augmented by additional credits of between $1,000 to $4,000—with the total federal tax credit capped at $8,000. According to Edmunds.com, a car shopping website, the 2016 Toyota Mirai qualifies for the full $8,000, while the 2016 Hyundai Tucson Fuel Cell, only available as a lease, qualifies for a $7,500 credit.

Arizona
Owners of hydrogen-fueled cars are exempt from emissions testing and use tax in Arizona—and are allowed to park without penalty in parking areas designated for carpool operators. In addition, during the first year after initial registration, the fuel-cell car’s assessed value is 1 percent of the manufacturer’s base retail price (compared to 60% for conventional vehicles).

California
As mentioned above, the California Clean Vehicle Rebate Project provides a cash rebate of $5,000 for purchasing or leasing eligible fuel-cell cars. For info, see https://cleanvehiclerebate.org/.

Drivers of hydrogen fuel-cell vehicles that receive a Clean Air Vehicle sticker may use the state’s HOV lanes, regardless of the number of passengers in the vehicle. The San Joaquin Valley Air Pollution Control District could provide a rebate of up to $3,000 for residents based in the region. For more info, visit: http://valleyair.org/grants/driveclean.htm

Colorado
Hydrogen vehicles titled and registered in Colorado are eligible for a tax credit for 18 percent of the actual cost of the vehicle. For more information, visit: https://www.colorado.gov/pacific/sites/default/files/Income67.pdf

Connecticut
Fuel-cell vehicles listed as qualified under the Connecticut Hydrogen and Electric Automobile Purchase Rebate program may receive a rebate of up to $5,000. For more info, visit: http://www.ct.gov/deep/cwp/view.asp?a=2684&q=561424&deepNav_GID=2183

District of Columbia
Qualified alternative fuel vehicles, including fuel-cell cars, with an estimated average city fuel economy of at least 40 miles per gallon, are exempt from the excise tax imposed on an original certificate of title.

Indiana
Hydrogen cars are exempt from inspection and maintenance requirements.

Massachusetts
Massachusetts provides rebates of up to $2,500 for the purchase or lease of zero-emission vehicles, including fuel-cell cars. For more info, visit https://mor-ev.org/.

Nevada
Hydrogen cars are exempt from Nevada’s emissions testing requirements. 

Pennsylvania
Pennsylvania offers rebates up to $1,000 to assist eligible residents with the incremental cost of the purchase of new hydrogen vehicles. For more information, see: http://www.dep.pa.gov/Citizens/GrantsLoansRebates/Alternative-Fuels-Incentive-Grant/Pages/default.aspx#.Vl9OeHarSUk

Utah
Qualified fuel-cell vehicles may use designated HOV lanes regardless of the number of occupants in the vehicle. Hydrogen used to operate vehicles is exempt from state fuel taxes, but subject to a special fuel tax at the rate of three-nineteenths of the conventional motor fuel tax.

Washington
New passenger cars that exclusively operate on hydrogen are exempt from state motor vehicle sales and use taxes. Qualified vehicles must meet the California motor vehicle emissions standards; have a fair market value less than $35,000; and comply with the rules of the Washington Department of Ecology. The sales tax exemption expires July 1, 2019. See Washington Department of Revenue’s Incentives Programs website.

 

Comment with Facebook

comments

Leave a Reply