Maryland state legislation could increase the tax credit received for electric cars to $3,000 per vehicle.
Marylander’s currently receive $100 times the number of kilowatt-hours of the battery capacity of their electric vehicle with a maximum of $3,000. With this bill, each new electric vehicle purchased will count for $3,000 regardless of battery size.
While plug-in electric and fuel cell vehicles are both currently covered, this tax credit would only apply to fully electric vehicles and would not cover hybrid cars, according to the bill’s lead sponsor, Delegate David Fraser-Hidalgo, D-Montgomery.
House bill 1246, named the Clean Cars Act of 2019, would also increase the maximum price of qualified electric vehicles from $60,000 to $63,000 to adjust for inflation from when the initial limit was set by the Clean Cars Act of 2017, according to Fraser-Hidalgo.
Due to of a shortage of funding for electric vehicle tax credits in 2017, this legislation is intended to provide enough money to incentivize more Marylanders to purchase zero-emission vehicles, Fraser-Hidalgo said.
This bill would allow the Maryland Department of Transportation Motor Vehicle Administration to raise the total amount of tax credits to be awarded in total for fiscal year 2020 to $6 million, an increase from the $3 million set aside annually for tax credits by the Clean Cars Act of 2017.
The U.S. also offers a federal tax credit of up to $7,500 for owning an electric vehicle, according to the Internal Revenue Service.
“That $3,000 tax credit, coupled with the federal $7,500 tax credit…is extremely important to getting the new vehicles in a budget range in which Marylanders can afford,” Fraser-Hidalgo said. “The electric cars, they’re just better in pretty much every way,” he said.
Maryland Policy & Politics
A separate Clean Cars Act of 2019--Senate bill 168--was proposed by Gov. Larry Hogan, R, with the primary difference being that Fraser-Hidalgo’s bill would also provide a $1,500 tax credit to people purchasing used electric vehicles, Fraser-Hidalgo said. Senate bill 168 was heard by a Maryland Senate committee Feb. 12.
While Fraser-Hidalgo’s bill would rename the Maryland Electric Vehicle Infrastructure Council to the Maryland Zero Emission Electric Vehicle Infrastructure Council, Hogan’s bill would change the name to the Maryland Zero Emission Vehicle Infrastructure Council. Both measures would focus the organization on promoting fuel cell vehicles.
In 2007, Maryland became one of eight states that adopted California’s Zero Emission Vehicles program, according to the Maryland Department of the Environment. Adhering to the standards of the program—later enforced through Maryland legislation in 2011—Maryland must have 60,000 registered zero emission vehicles by 2020 and 300,000 registered by 2025.
The number of electric vehicles registered in Maryland doubled between 2017 and 2018. As of February, there are over 18,000 electric vehicles registered in Maryland, according to the Maryland Department of Transportation Motor Vehicle Administration.
Members of the petroleum industry argued that the tax credits outlined in the Clean Cars Acts disproportionately benefit the wealthy and educated. Mid-Atlantic Petroleum Distributors Association Inc. Executive Vice President Ellen Valentino said this bill and its 2017 predecessor are “talking to a very narrow segment” of the population.
“This has not been a successful program,” Valentino said. “Six million dollars is a lot of money for people shopping for a $63,000 new vehicle,” she told legislators on Tuesday.
House bill 1246 passed through the Maryland House of Delegates March 18 and was heard by a Maryland Senate committee on Tuesday.