IRS definitions of what's a car vs SUV by manufacturer for $55k vs $80k price limit

[SageBrush]

Based on this section of vehicle code

The attachment shows non-passenger vehicles

Ohh ... I see what you mean. Thanks

 

[mongo]

The IRS didn’t assume anything. Tesla submitted info stating which of their cars qualify. See my post above - the 3-row 7 seat variants don’t qualify as utility vehicles - they qualify under the rules that define vans. MYP only qualifies at the $80k MSRP limit, as with the MYLR, if it has the third row option.

5 seat MYP and MYLR are both “cars” at the $55k limit.

Why are 3 rows Ys not SUVs?
Van and SUV are both light trucks.

Three with two rows that fold is a light truck/ non-passenger automobile under 523.5(a)(5)(ii).

(ii) For non-passenger automobiles manufactured in model year 2008 and beyond, for vehicles equipped with at least 3 rows of designated seating positions as standard equipment, permit expanded use of the automobile for cargo-carrying purposes or other nonpassenger-carrying purposes through the removal or stowing of foldable or pivoting seats so as to create a flat, leveled cargo surface extending from the forwardmost point of installation of those seats to the rear of the automobile's interior.

An enclosed light truck with rear seats is a SUV per 49 CFR 600.002

Sport utility vehicle (SUV) means a light truck with an extended roof line to increase cargo or passenger capacity, cargo compartment open to the passenger compartment, and one or more rear seats readily removed or folded to facilitate cargo carrying.

A van is

Van means any light truck having an integral enclosure fully enclosing the driver compartment and load carrying compartment. The distance from the leading edge of the windshield to the foremost body section of vans is typically shorter than that of pickup trucks and SUVs.

 

[SageBrush]

Why are 3 rows Ys not SUVs?
Van and SUV are both light trucks.

From your post, the definition of light truck includes

The term light truck includes medium-duty passenger vehicles which are manufactured during 2011 and later model years.

 

[ucmndd]

Why are 3 rows Ys not SUVs?

Because they do not meet the non-passenger vehicle clearance requirements in section B of the code I posted, but do meet the requirements in section A.

 

[mongo]

Because they do not meet the non-passenger vehicle clearance requirements in section B of the code I posted, but do meet the requirements in section A.

High level issue:
SUV is a light truck
Van is a light truck
If a vehicle isn't a light truck, it's neither an SUV nor a van.

Light truck:
(a) and (b) is an interesting possibility. The wording is:

A non-passenger automobile means an automobile that is not a passenger automobile or a work truck and includes vehicles described in paragraphs (a) and (b) of this section:

"Described in (a) and (b)" not "meeting the requirements of both (a) and (b)". So either (a) or (b), not (a) and (b), if it were both, there would be an ";and" at the end of clause (a). Like this:

(ii) Is rated at more than 6,000 pounds gross vehicle weight; and

At least, that's how I had read it. However, looking at the definition of passenger automobile:

523.4 Passenger automobile.

A passenger automobile is any automobile (other than an automobile capable of off-highway operation) manufactured primarily for use in the transportation of not more than 10 individuals.

The parenthetical calling out off-highway supports (a) and (b), However, if that were the case, where does (a) fit in? Would only (b) be sufficient?

 

[AndrewZ]

Not to distract from the super interesting off-topic food banter, but:

As there are multiple threads on this subject, I’m cross-posting my analysis here of how the $55k vs $80k distinction is being made.

IRS weighs in on tax rebate, mostly bad news for Model Y

So, nothing. 👍🏻 Hyundai cross traffic is pretty awesome. If you are backing out of a parking space, it will beep at you and then hit the brakes before you hit another car. My driveway has a blind spot because of vegetation; it sees cars that I can’t see and hits the brakes. This is the one...

teslamotorsclub.com

Based on this section of vehicle code, everything seems to match up.

https://teslamotorsclub.com/tmc/attachments/0e78a8e4-2187-4299-bc41-9e9e6888b4bd-png.845429/

Makes sense, so the 7-seater qualifying under the van definition is definitely a "win" in providing the only way a Y variant was going to be held to the $80k cap

 

[mongo]

From your post, the definition of light truck includes

The term light truck includes medium-duty passenger vehicles which are manufactured during 2011 and later model years.

Sure, but that clause is additive to the rest of the definition and is there to negate the work truck exclusion of 523.5, it's not a requirement.

Full Light Truck:

Light truck means an automobile that is not a passenger automobile, as defined by the Secretary of Transportation at 49 CFR 523.5. This term is interchangeable with “non-passenger automobile.” The term “light truck” includes medium-duty passenger vehicles which are manufactured during 2011 and later model years.

Medium-duty passenger vehicle:

Medium-duty passenger vehicle means a vehicle which would satisfy the criteria for light trucks as defined by the Secretary of Transportation at 49 CFR 523.5 but for its gross vehicle weight rating or its curb weight, which is rated at more than 8,500 lbs GVWR or has a vehicle curb weight of more than 6,000 pounds or has a basic vehicle frontal area in excess of 45 square feet, and which is designed primarily to transport passengers, but does not include a vehicle that:

(1) Is an “incomplete truck” as defined in this subpart; or

(2) Has a seating capacity of more than 12 persons; or

(3) Is designed for more than 9 persons in seating rearward of the driver's seat; or

(4) Is equipped with an open cargo area (for example, a pick-up truck box or bed) of 72.0 inches in interior length or more. A covered box not readily accessible from the passenger compartment will be considered an open cargo area for purposes of this definition.

Light truck (should it be 'nor'?) *:

523.5 Non-passenger automobile.

A non-passenger automobile means an automobile that is not a passenger automobile or a work truck and includes vehicles described in paragraphs (a) and (b) of this section:

Work truck:

Work truck means a vehicle that is rated at more than 8,500 pounds and less than or equal to 10,000 pounds gross vehicle weight, and is not a medium-duty passenger vehicle as defined in 49 U.S.C. 32901(a)(19).

*this calls into question my interpretation of light truck as passenger automobile only calls out off-highway.
However, subpart (a)(4) and (a)(5) of 523.5 are the criteria that make the vehicle cargo centric, not passenger centric. 10 people is repeated in (a)(1)
(So much redundancy...)

523.4 Passenger automobile.

A passenger automobile is any automobile (other than an automobile capable of off-highway operation) manufactured primarily for use in the transportation of not more than 10 individuals.

 

[Mike7564]

As I mentioned before, unless this gets challenged/etc, this classification only adds to the fact that the feature set and pricing for different models will see significant fluctuation/rethinking from Tesla.

Already was in flux given the economy, borrowing costs, demand issues, competition, and resolution of supply chain issues. This just adds fuel to the fire.

For those who opted to pick up a $7500 discount, congrats. Enjoy the car. For those who didn’t (intentionally or unintentionally), you may be in a very good situation when this shakes out.

 

[SageBrush]

Light truck:
(a) and (b) is an interesting possibility. The wording is:

If the writers would be consistent in using the logical 'AND' to mean intersection, and the logical 'OR' to mean a union, we might be able to parse this mumbo jumbo eventually. As it is, I give up before a splitting headache comes my way out of aggravation.

 

[mongo]

If the writers would be consistent in using the logical 'AND' to mean intersection, and the logical 'OR' to mean a union, we might be able to parse this mumbo jumbo eventually. As it is, I give up before a splitting headache comes my way out of aggravation.

Especially since there is neither an 'and' nor an 'or' between (a) and (b). So it's a list? and if a vehicle is described in it somewhere?

More fun... Minivans are not off highway... (or at least, they won't get back on...)

Minivan means a light truck which is designed primarily to carry no more than eight passengers, having an integral enclosure fully enclosing the driver, passenger, and load-carrying compartments, and rear seats readily removed, folded, stowed, or pivoted to facilitate cargo carrying. A minivan typically includes one or more sliding doors and a rear liftgate. Minivans typically have less total interior volume or overall height than full sized vans and are commonly advertised and marketed as “ minivans.”

 

[240vPlug]

Everyone finances are different so I don't want to get into that disucssion. Doesn't that 150k limit mean AGI? Even a single filer with an AGI <150 probably makes significantly more if he/she has a good accountant. Those limits are very generous for income.

If we are talking about what is smart...buying a new car is not smart period. The best way to buy a car is to buy one that is 5 or more years old and to drive it for ten year or more. Its not much fun though

 

[SageBrush]

Doesn't that 150k limit mean AGI?

Kiplinger says mAGI
My non-CPA version is that mAGI = AGI + untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest

 

[snpiperpilot]

With the income limits, I don’t think many Tesla buyers will get the credit anyway. Who buys a $70k car if they make less than $150k per year? That wouldn’t be too smart.

retired people with savings who planned ahead. ;-)

 

[snpiperpilot]

Tesla has some tough choices to make. I say make 7 seat standard across the line and let folks opt out if they want. That would be cheaper than discounting the 5 seat models to qualify for the credit. Tesla has a bit of a demand problem so they need incentives.

or make a lightweight removable 3rd row for cheap to qualify. i would take out and store forever.

 

[hmmwv]

Honesty, remember Tesla has a quite substantial profit margin built into the current price paid. Even after the $7500 (the price increase for inflation/supply chain is far greater than 7.5k). If I was Tesla, I’d be focusing on making my margin on items which have almost zero marginal cost (software enabled purchases).

So sell a sub 55k MY, non USS, non-radar. Remove even autopilot on freeways. Basic suspension. Basic cameras. Really make it something a middle class family would buy in that qualifying income range to lug kids around, Costco etc. compete with a Prius etc.

Then offer basic autopilot for few thousand of people want it.

Then offer a higher end version (aka tech version) with HD radar, extra long range batteries/faster charging (4680), USS, suspension, etc. Nicer interior finishes. Only this version would be FSD/EAP capable (separate software add on). Folks who can afford the higher price range at 60-70k, don’t want to jump to 100+k for a MX, and probably income won’t qualify anyway can purchase this.

You're overthinking it my friend, Tesla can already sell the MYAWD5 at $55k comfortably, no need to swap in cheaper components. Introducing that many new SKUs to the supply chain is simply not cost effective. This is what I believe Tesla will do when this trim is reintroduced.

The document did provide some justification for the classifications, at least it explains why the even the AWD Mustang Mach-E is only a passenger vehicle.

 

[Mike7564]

You're overthinking it my friend, Tesla can already sell the MYAWD5 at $55k comfortably, no need to swap in cheaper components. Introducing that many new SKUs to the supply chain is simply not cost effective. This is what I believe Tesla will do when this trim is reintroduced.

The document did provide some justification for the classifications, at least it explains why the even the AWD Mustang Mach-E is only a passenger vehicle.

Guess we will see! Happy new year all. Should be an interesting one.

 

[cusetownusa]

Food for family of 4/5 easily costs $2k-$3k/month. My electric bill alone is double that ~$800/month. You're forgetting phones. Thats another $200/month. Prop/school taxes, thats another $1k a month. Tuition? I'm not even touching all the little things that add up in daily life.

Damn. I don’t live that far from you and those numbers are multiples of what we pay as a family of 4. I am assuming you have the same utility company, etc. Property taxes are indeed stupid high in our area.

 

[yobigd20]

Property taxes are indeed stupid high in our area.

Still cheaper than NJ. Electric over $1k a month and prop taxes $2k/month there. Car insurance in NJ was 2-3x higher than NY as well for same coverage.

 

[cusetownusa]

You live in New Mexico. He lives in NY. Big difference in cost of living.

He lives in CNY, no where near NYC. Might as well be 2 different states (cost of living wise, etc). I live in the same area and his expenses are multiples of ours. For example, my electric bill probably average $108 per month (over the last 12 months) and I drive about 800-1000 per month with my Model Y.

 

[fonger]

I think think the 55k limit will help us the consumer, it will force the car manufacturers to have a lower price option. Those who waited will probably make out well, will just have to wait a few months for manufacturers to figure out the new option.