Tax Credit Clarification

[SageBrush]

I should be right in the 18% bracket.

Is there an 18% tax bracket ?

 

[CarlitoDoc]

Ouch...my head hurts reading the last 3 pages. Anyway, let me guess this straight:
For those of us who pay a "substantial" amount in Federal Taxes every year.....the $7500 tax credit is the best way to go, obviously by purchasing the vehicle out right, correct? Here's a curve ball: What if you purchase 2 EV vehicles? Say a MS in 2017 and a M3 in 2018?? Is there a lifetime limit to the amount of Tax credits per individual??

 

[ohmman]

Is there a lifetime limit to the amount of Tax credits per individual??

Not currently. Not annually or lifetime. If you have $750k in tax liability, you could buy 10 Teslas and take advantage of the tax credit on each of them.

 

[SageBrush]

Not currently. Not annually or lifetime. If you have $750k in tax liability, you could buy 10 Teslas and take advantage of the tax credit on each of them.

And more ;-)

 

[ohmman]

And more ;-)

Gah! Maths! Those darn factors of 10 are so tricky...

 

[AZ Desert Driver]

Gah! Maths! Those darn factors of 10 are so tricky...

ohhh, mr ohm man...I just saw your avatar blink. seen it many times, and only now got the blink.
Think I could make my conductors wings flap?

 

[smak]

What are the possibilities of Tesla fudging with how they record a car sale to allow more people to get the rebate?

Could they have you purchase a car in December 2017, finance through Tesla, and give you 6 months of no payments while awaiting your car to be ready?

could their be anything in the tax credit language that says something about "delivery" of a car instead of just the "purchase of a car"?

-smak-

 

[garsh]

What are the possibilities of Tesla fudging with how they record a car sale to allow more people to get the rebate?

The date used for the income tax credit is the date the vehicle is "placed in service" (i.e., the date of delivery). Therefore, Tesla just needs to time the delivery of their 200,000th vehicle (sold to a buyer in the U.S.A.) to be right at the beginning of a quarter. That will maximize the number of people who will qualify for the credit. They can do this fairly easily by shifting deliveries to Canada or Mexico as they get close to the limit.

They could go one step further, and build up a backlog of cars during a quarter without delivering them, and then release them all at once. I don't see this happening, since it deprives Tesla of much-needed income, and they'd need to find space to store the vehicles, and they would have to insure those vehicles against damage, etc.

 

[wdolson]

Tesla already spends half of their quarter building cars for the international market and half for the US market. They usually build the international cars in the first part of a quarter so they can be delivered by the end of the quarter and the domestic cars at the end (shorter shipping time and many of those cars will be delivered by the end of the quarter). I'm sure they can adjust production and possibly offer some kind of incentive to push them over the 200K domestic cars right at the best time. They are in a position to do it better than any other car maker because of the way they make cars. When they are very close to the line they can tell the stores to quit selling inventory cars until the beginning of the next quarter and have a bunch of deliveries on the first day of the new quarter.

In other words they have a lot of variables they can play with to maximize the effect.

 

[Chopr147]

Read this story which was published two days ago on BGR.com. It explains tax credit in simple terms. I believe it is also accurate.
Why Americans should order the Tesla Model 3 as fast as possible
By Chris Smith on May 6, 2016 at 10:30 PM
Sorry I don't know how to just put a link to it on
OK figured it out


Why Americans should order the Tesla Model 3 as fast as possible

 

[AZ Desert Driver]

can any of you comment on the Colorado tax incentives? I'm thinking of moving back to the high country and don't recall how long it takes to qualify for the rebates.

 

[melindav]

can any of you comment on the Colorado tax incentives? I'm thinking of moving back to the high country and don't recall how long it takes to qualify for the rebates.

the DOE has a summary for each state here's the CO link
For other states, pick from the pulldown at the top of the page.

 

[AZ Desert Driver]

thanks....but this complex site yaps about fleet recharging...and I could not parse residency. Is there a dummy guide to Colorado ev policy?

 

[SageBrush]

DD, are you asking about part-time residency ?

 

[AZ Desert Driver]

DD, are you asking about part-time residency ?

used to live in golden, might want to return full time. but might try half step--reverse snowbird

 

[melindav]

from this worksheet, it just looks like the vehicle has to be registered/titled in CO.
There is even a comment that if the tax credit is greater than the CO tax liability, the credit can be refunded (unlike the Fed credit), so if you were to only work part of the year in CO, the way I am reading it, you would qualify for the entire credit as long as the car is titled and registered in Colorado.

 

[SageBrush]

AFAIK, this is the state's entire say on the EV credit topic. I do not remember reading discussion about part time residency so it would seem reasonable (hah!) to presume that the part-time question would be handled in the same was as any other credit

Colorado Residency, with a little discussion of other credits.

 

[SageBrush]

Colorado specific car fees/taxes
Some variation by county

 

[Scannerman]

I am super excited about my Model 3 and it seems like most articles I read about the Tax Credits has been wrong and people keep spreading rumors that most Model 3 buyers won't get it. I totally think that most buyers WILL get some Tax Credit. Below is my breakdown.

Once Tesla delivers its 200,000th vehicle in the US, then the Phaseout process starts. It does not just end but there is a 15 month phaseout process.

Pre-Phaseout: The CALENDAR QUARTER that the 200,000th vehicle is sold in is entitled to the FULL $7500 tax credit.

Phaseout Part 1: After the end of the Pre-Phaseout Quarter, then the IRS give you ANOTHER CALENDAR QUARTER (3 months) with the FULL $7500 tax credit.

Phaseout Part 2: After the end of Phaseout Part 1, there are TWO QUARTERS (6 months) with a redued 50% tax credit (that is $3,750).

Phaseout Part 3: After the end of Phaseout Part 2, there are TWO MORE QUARTERS (6 months) with a reduce 25% tax credit (that is $1,875)

Then bye bye tax credits. So there is literally 15 months plus the original quarter the 200,000th car is delivered on. I am pretty darn sure Tesla will attempt to deliver their 200,000th vehicle very very close to the Model 3 release. There is literally 15 months of tax credits for Model 3 owners.

Here are my sources (very reliable as it is from the government themselves with clear examples):

1. Federal Tax Credits for All-Electric and Plug-in Hybrid Vehicles
^^Scroll to the bottom and READ the PHASEOUT SECTION

2. Elon Musk tweeted on Monday, April 4, 2016 "Our production ramp should enable a large number of non X/S customers to receive the credit".

Another twitter user suggested to Elon that he slow down production so that the delivery of the Model 3 falls right on the 200,000th vehicle

Elon Musk replied " We always try to maximize customer happiness even if that means a revenue shortfall in a quarter. Loyalty begets loyalty."

^^ I think it is pretty clear that Elon Musk will make sure that most Model 3 buyers get some tax credit.

Attached are some screenshots that validate my analysis. Anyways...just thought I would help spread TRUTH instead of rumors. If you know someone who thinks they won't get the tax credit, please have them review this article.

View attachment 171087 View attachment 171088

I would say you provided a very good description. But in order to maximize the potential customer savings, would not Elon stage the 200,000th domestic delivery at the very beginning of a particular quarter. The date for that quarter would remain to be determined. Accordingly he would have basically 6 months to sell his heart out, exhausting all completed models in his inventory, plus everything his staff could manufacture!

Scannerman

 

[Kimo]

FYI: Colorado just passed a new budget that changes the EV credit. From my understanding, instead of the potential $6k credit, it is now a $5k immediate credit at the time of purchase (i.e. the manufacture is able to reduce the price of a vehicle $5k). I personally like this much better, as it provides the buyer the ability to either