The world economy has been a bit shaky in the last few years and many countries are going to impose new rules. Inflation has reached a way that has impacted every aspect of the economy. The government is now planning to impose more tax on the purchase of EVs. This is not new; many people have demanded that EVs should be more expensive. As inflation has risen, the IRS now plans to impose more tax liability on the 1st time purchase of EVs.
What is the government’s explanation?
The IRS and the treasury department have released small clarifications regarding the issue of tax implementation on Electric Vehicles. The first one is about the level of credibility of the person who is going to purchase it. The next one is the imposition of Tax on the use of EVs when it is shown as commercial use. Meaning that if a car is bought under the commercial use policy, more tax has to be paid. Finally, the explanation of MSRP limits.
There are loopholes too
As new rules are there, there are many loopholes to their provision. First, the IRS did not mention the sourcing of the car in its new rules of taxes. It creates an issue, as various car companies have different price ranges depending on the car. Also, some of the EVs are not eligible for federal tax due to their company policy. The new rules do not include any information regarding this issue.
What should be the next step?
The market for EVs is not going anywhere soon. People are going to buy and produce more and more EVs. But only time can tell whether we will be able to enjoy the service of EV more smoothly or not over time. Until then, plan for your EV if you have one in mind.