Here is a good plain english summary:
Build Back Better Act — Rules Committee Print 117-18
Section-By-Section
PART 4 – GREENING THE FLEET AND ALTERNATIVE VEHICLES
Section 136401. Refundable new qualified plug-in electric drive motor vehicle credit for individuals.
This provision provides for a refundable income tax credit for new qualified plug-in electric drive motor vehicles placed into service by the taxpayer during the taxable year. The credit is limited to one vehicle per-taxpayer per-taxable year.
The amount of credit allowed by this provision with respect to a qualified vehicle is equal to the base amount of $4,000 plus an additional $3,500 for vehicles placed into service before January 1, 2027 with battery capacity no less than 40 kilowatt hours and a gasoline tank capacity not greater than 2.5 gallons, and for vehicles with battery capacity of no less than 50 kilowatt hours thereafter.
The amount credit allowed for a qualified vehicle is increased by $4,500 if the final assembly of the vehicle is at a facility in the United States which operates under a union-negotiated collective bargaining agreement.
The amount of credit allowed for a qualified vehicle is increased by $500 if the vehicle model are powered by battery cells which are manufactured within the United States.
The amount of credit allowed for a qualified vehicle is limited to 50 percent of its purchase price.
Beginning in 2027, this credit shall only apply with respect to vehicles for which final assembly is within the United States.
For purposes of this credit, a new qualified plug-in electric drive motor vehicle means a vehicle
• the original use of which commences with the taxpayer,
• is acquired for use by the taxpayer and not for resale, which is made by a qualified manufacturer,
• which is treated as a motor vehicle for purposes of title II of the Clean Air Act,
• which has a gross vehicle rating of less than 14,000 pounds,
• which is propelled to a significant extent by an electric motor which draws electricity from a battery which has a capacity of not less than ten kilowatt hours and is capable of being recharged from an external source of electricity,
• does not have a gasoline tax capacity of greater than 2.5 gallons, and
• is not depreciable property.
A qualified manufacturer means any manufacturer which enters into written agreement with the Secretary to ensure each vehicle manufactured meets the requirements of this provision and is labeled with a unique vehicle identification number, and that such manufacture will periodically provide such vehicle identification numbers to the secretary in such a manner as the Secretary may prescribe.
No credit shall be allowed for vehicle by which the manufacturer’s suggested retail price exceeds the applicable limitation, which is as follows:
• Vans: $80,000
• SUVs: $80,000
• Pick Up Trucks: $80,000
• For any other vehicle: $55,000
The credit is phased out by $200 for each $1,000 of the taxpayer’s modified adjusted gross income as exceeds $500,000 for married filing jointly, $375,000 for head of household, and $250,000 in any other case. For a given taxable year, the taxpayer may use modified adjusted gross income for that year or the immediately preceding year, whichever is lower.
The taxpayer may elect to transfer the credit to the vehicle dealer, provided the dealer is registered as an eligible entity with the Secretary, discloses the MSRP, credit amount, associated fees, and the amount to be paid to the taxpayer in the form of a down payment or otherwise with respect to the transfer of credit. The Secretary shall establish a program to make advance payments to any eligible dealer equal to the cumulative amount of transferred credits.
This provision provides for a 30% credit, not to exceed $7,500, for two and three wheeled plug in electric vehicles which have a battery capacity of no less than two and a half kilowatt hours, are manufactured primarily for use on roads and highways, and are capable of achieving a speed of 45 miles per hour or greater, and otherwise meet the requirements of this section.
The Secretary shall make payments to mirror code territories for the amount of revenue lost with respect to this provision. The Secretary shall make payments to non-mirror code territories for the amount of revenue lost with respect to operating a similar credit for electric vehicles.
This provision is made effective beginning after December 31, 2021, replacing section 30D, the plug-in electric drive motor vehicles credit.
No credit shall be allowed under this provision for vehicles acquired after December 31, 2031.
Section 136402. Credit for previously-owned qualified plug-in electric drive motor vehicles.
The provision creates a new refundable credit for the purchase of used battery and fuel-cell electric cars after date of enactment through 2031. Buyers can claim a base credit of $2,000 for the purchase of qualifying used EVs, with an additional $2,000 based on battery capacity. The credit is capped at the lesser of $4,000 or 50% of the sale price.
To qualify for this credit, used EVs must generally meet the eligibility requirements in the existing Section 30D credit for new EVs, not exceed a sale price of $25,000, and be a model year that is at least two years earlier than the date of sale.
Buyers with up to $75,000 ($150,000 for married couples filing jointly and $112,500 for head of household filers) in adjusted gross income can claim the full amount of the credit. The credit phases out by $200 for every $1,000 in AGI in excess of the limitation. Buyers must purchase the vehicle from a dealership for personal use and cannot claim the credit more than once every three years. The credit only applies to the first resale of a used EV and includes restrictions on sales between related parties. A “look-back rule” for the phaseout threshold allows taxpayers to use prior-year income for purposes of determining the phaseout of the credit. This rule keeps taxpayers eligible for the credit even when their income rises above the phaseout range in a single year.
The credit may be transferred to the seller of the previously-owned electric vehicle to allow the purchaser to access the value of the credit at the time of sale.
The Secretary shall make payments to mirror code territories for the amount of revenue lost with respect to this provision. The Secretary shall make payments to non-mirror code territories for the amount of revenue lost with respect to operating a similar credit for previously-owned electric vehicles.
Section 136403. Credit for qualified commercial electric vehicles.
This provision creates a new credit for qualified commercial electric vehicles placed into service by the taxpayer.
The amount of credit allowed by this provision with respect to a qualified commercial electric vehicle is equal to 30% of the cost of such vehicle, or 15% in the case of hybrid vehicles. A leasing company may elect to determine the credit using the structure of the individual credit under section 36C if the vehicle is leased to an individual. Tax-exempt entities have the option of electing to receive direct payments.
For purposes of the credit a qualified commercial electric vehicle means any vehicle
• the original use of which commences with the taxpayer,
• which is acquired for use or lease by the taxpayer and not for resale,
• which is made by a qualified manufacturer,
• which is treated as a motor vehicle for purposes of title II of the Clean Air Act or mobile machinery for purposes of section 4053(8),
• which is propelled to a significant extent by an electric motor which draws electricity from a battery which has a capacity of not less than ten kilowatt hours and is capable of being recharged from an external source of electricity, or is a fuel cell vehicle based upon the requirements of section 30B,
• is not powered by an internal combustion engine and is of a character subject to the allowance for depreciation.
A qualified manufacturer means any manufacturer which enters into written agreement with the Secretary to ensure each vehicle manufactured meets the requirements of this provision and is labeled with a unique vehicle identification number, and that such manufacture will periodically provide such vehicle identification numbers to the secretary in such a manner as the Secretary may prescribe. No credit shall be allowed with respect to any qualified vehicle unless the taxpayer includes the vehicle identification number of such vehicle on their return for that taxable year.
This provision shall take effect after December 31, 2021. No credit shall be allowed under this provision for a vehicle acquired after December 31, 2031.
Section 136404. Qualified fuel cell motor vehicles.
This provision extends the credit for the purchase of a qualified fuel cell motor vehicle through 2031, but only with respect to vehicles not of a character subject to depreciation. Beginning on January 1, 2022, commercial fuel cell vehicles otherwise eligible for this credit will be eligible for the new section 45Y credit for qualified commercial electric vehicles.
Section 136405. Alternative fuel refueling property credit.
The provision extends the alternative fuel vehicle refueling property credit through 2031. Beginning in 2022, the provision expands the credit for zero-emissions charging and refueling infrastructure of a nature subject to depreciation by providing a base credit of 6% for expenses up to $100,000 and 4% for allowable expenses in excess of such limitation (i.e., it allows a credit for expenses beyond the limit if certain requirements are met). The provision provides an alternative bonus credit level of 30% for expenses up to $100,000 and 20% thereafter.
To qualify for the credit for expenses in excess of the $100,000 limitation, the property must: 1) be intended for general public use and either accept credit cards as a form of payment or not charge a fee, or 2) be intended for exclusive use by government or commercial vehicle fleets.
In order to claim the bonus credit amount with respect to eligible property, taxpayers must satisfy prevailing wage requirements for the duration of the construction of such property.
This provision also clarifies that bidirectional charging equipment is eligible property and expands the list of eligible property to include electric charging stations for electric 2- and 3-wheeled motor vehicles manufactured for use on public street, roads, and highways, but only if such stations are 1) intended for general public use and either accept credit cards as a form of payment or not charge a fee, or 2) intended for exclusive use by government or commercial vehicles.
Section 136406. Reinstatement and expansion of employer provided fringe benefits for bicycle commuting.
This provision eliminates the temporary suspension of the exclusion for qualified bicycle commuting benefits and increases the maximum benefit from $20 per month to $81 per month.
This provision expands the definition of qualified benefit to include the direct or indirect provision of qualified commuting property by an employer and employer reimbursement of expenses incurred for the purchase, financing, lease, rental (including bikeshare), improvement, or storage of qualified commuting property if the employee regularly uses such property for travel between the employee’s residence and place of employment or mass transit facility connecting an employee to place of employment.
Qualified community property includes bicycles, electric bicycles (within the meaning of Section 30E as established by this legislation), 2- or 3-wheeled scooters (other than scooters equipped with motors), and any 2- or 3-wheeled scooter propelled by an electric motor if such motor does not provide assistance in excess of 20 miles per hour.
Section 136407. Credit for certain new electric bicycles.
This provision provides for a 30% refundable tax credit for qualified electric bicycles placed into service before January 1, 2026.
Beginning in 2022, taxpayers may claim a credit of up to $900 for electric bicycles placed into service by the taxpayer for use within the United States. A taxpayer may claim the credit for one electric bicycle per taxable year (two for joint filers). The credit phases out starting at $75,000 of modified adjusted gross income ($112,500 for heads of household and $150,000 for married filing jointly) at a rate of $200 per $1,000 of additional income. For a given taxable year, the taxpayer may use modified adjusted gross income for that year or the immediately preceding year, whichever is lower.
A qualified electric bicycle is defined as a bicycle which is equipped with fully operable pedals, a saddle or seat for the rider, an electric motor of less than 750 watts which is designed to provide assistance in propelling the bicycle, and does not provide assistance if the bicycle is moving in excess of 20 miles per hour or only provides assistance when the rider is pedaling and does not provide assistance if the bicycle is moving in excess of 28 miles per hour.
In order to be eligible for the credit, the aggregate amount paid for the acquisition of such bicycle must not exceed $4,000.
In order for an electric bicycle to be eligible for the credit, the manufacturer must assign each bicycle a unique vehicle identification number and report such information to the Treasury in a manner prescribed by the Secretary. Taxpayers must then provide the proper vehicle identification number assigned to the electric bicycle by the manufacturer in order to claim the credit.
The credit may be transferred to the seller of the electric bicycle to allow the purchaser to access the value of the credit at the time of sale.
The Secretary shall make payments to mirror code territories for the amount of revenue lost with respect to this provision. The Secretary shall make payments to non-mirror code territories for the amount of revenue lost with respect to operating a similar credit for electric bicycles.