Electric Motorcycle Tax Credit and Sales Tax Deduction

Federal Tax Credit, Sales Tax Deduction, and State Incentives

Zero Motorcycles line of street legal electric motorcycles are eligible for the recently passed 10% federal tax credit for plug-in vehicles.

The tax credit will be available on your 2010 IRS Form 1040.

Example - purchase of a Zero S:
If you purchase a Zero S for $9,995 and keep the receipt. At the end of the year you will be eligible for a 10% tax credit. This means the federal government will literally give you back $999. This effectively reduces the purchase price of your motorcycle by $1000 and reduces the total cost to $8,995.

Federal Tax Credit - the Details

As part of the American Recovery and Reinvestment Act of 2009 (H.R.1) two new tax incentives were included for electric motorcycles.

This is a tax credit in Section 1142 (H.R.1, pp. 214-217) which changes IRS Code Section 30 to allow for 2 wheeled electric vehicles to be included as a “qualified plug-in electric vehicle” in the overall plug-in vehicle tax credit. These vehicles which need to be able to drive on public roads, streets, and highways, are eligible for a 10% Federal Tax Credit up to a maximum of $2,500. This is a Federal tax credit, which reduces your tax liability by the amount of the credit; eg: if you owe $5,000 to the IRS and purchase an $11,000 electric motorcycle package, you would receive an $1,100 credit and now owe $3,900. If you are owed a refund by the IRS, your refund is increased by the amount of the tax credit.

As with all tax matters, this information does not constitute tax advice, please consult your tax advisor, attorney, or accountant for specific details on how to claim these tax benefits. The IRS will be providing final forms and instructions for these new tax incentives later in 2010.

Stimulus Incentives by State

There are now at least sixteen states that have either passed or have under consideration plug-in tax credits (BEV or PHEV). The original Federal tax credit of $2500-$7500 was signed into law on 10/3/08 and has since been expanded to cover motorcycles.

	California Has a rebate system in place (AFIP) and it is anticipated to receive up to $1M in additional funding. The new proposed AQIP program (with AB118 funding) will have $5000 for EVs, $3000 for PHEV, and $1500 for electric motorcycles (ZEMs) and Neighborhood Electric Vehicles (NEVs).California
	Colorado Law covers both HEV and PHEV with a % credit. Read more
	Connecticut Considering exemption from sales taxes
	Florida $2,000 - In process
	Georgia 20% of EV cost up to $5,000, 10% of PHEV cost up to $2,500. Read more
	Louisiana Has a percentage based credit: income tax credit worth 20% of the cost of converting a vehicle to operate on an alternative fuel, 20% of the incremental cost of purchasing an Original Equipment Manufacturer (OEM) AFV or hybrid electric vehicle (HEV). Read more
	Maryland Law covers both HEV and PHEV with a $2,000 credit. Read more
	Massachusetts Has a pilot program with 50% of the cost covered. Read more
	New Jersey Considering exemption from sales taxes

	Oklahoma 50% incremental cost coverage in place. Read more
	Oregon $5,000 - In process
	Pennsylvania Considering exemption from sales taxes
	South Carolina $2,000 Read more
	Texas $5,000 - Just proposed
	Washington Sales tax exemption in place
	West Virgina Up to $2,500 for an alt fuel vehicle, including EVs
	Wisconsin Considering exemption from sales taxes

"Stimulus by State" information is courtesy of Plug In America.