New Pricing-Federal Tax Credit Extension for 2013?

New Pricing-Federal Tax Credit Extension for 2013?

I was lookin at the new blog entry about the increased pricing and noticed that TM is still including the $7,500 tax credit yet this particular credit expires at the end of 2012 with no word yet on if it will be extended in to 2013. Anyone heard anything? I tried to post on the blog but they haven't approved my comment yet.

nwdiver93 | December 8, 2012

This tax credit does not "expire" it will phase out once Tesla produces 200,000 cars... hopefully soon :) but not 2013; and unfortunately probably not 2014, 2015 or 2016 either.

There is rumor that Obama wants to change it to a $10,000 refund that come right of the price of the car instead of your taxes.

BigTex | December 8, 2012

Oh wow- I was misinformed. Thanks for the link!

Brian H | December 8, 2012

I think there's an UPPER price limit on the $10K proposal ($50K?), so $7500 would still apply to the MS.

Nick Kordich | December 9, 2012

@Brian H - You are correct, though the proposed limit was a $45,000 MSRP. From what I've heard, it is highly unlikely that it would get through.

From the "green book" summary under the current proposals PDF, here's the proposed change:

The proposal would replace the credit for plug-in electric drive motor vehicles with a credit for advanced technology vehicles. The credit would be available for a vehicle that meets the following criteria: (1) the vehicle operates primarily on an alternative to petroleum; (2) as of the January 1, 2012, there are few vehicles in operation in the U.S. using the same technology as such vehicle; and (3) the technology used by the vehicle exceeds the footprint based target miles per gallon gasoline equivalent (MPGe) by at least 25 percent. The Secretary of the Treasury, in consultation with the Secretary of Energy, will determine what constitutes the same technology for this purpose. The credit would be limited to vehicles that weigh no more than 14,000 pounds and are treated as motor vehicles for purposes of title II of the Clean Air Act. In general, the credit would be the product of $5,000 and 100 and the amount by which the vehicle’s footprint gallons per mile exceeds its gallons per mile, but would be capped at $10,000 ($7,500 for vehicles with an MSRP above $45,000). The credit for a battery-powered vehicle would be determined under current law rules for the credit for plug-in electric drive motor vehicles if that computation results in a greater credit. The credit would be allowed to the person that sold the vehicle to the person placing the vehicle in service (or, at the election of the seller, to the person financing the sale), but only if the amount of the credit is disclosed to the purchaser.

The credit would be allowed for vehicles placed in service after the date of enactment and before January 1, 2020. The credit would be limited to 75 percent of the otherwise allowable amount for vehicles placed in service in 2017, to 50 percent of such amount for vehicles placed in service in 2018, and to 25 percent of such amount for vehicles placed in service in 2019.

pb32 | December 12, 2012

There was a discussion on that tax credit before that for the life of me I can't find using the "site:" search. Would appreciate if someone can point me to it.


TheAustin | December 12, 2012

Are there any personal limitations on the $7,500 tax credit (i.e. Your income level?)

stephen.pace | December 12, 2012

You have to pay at least $7,500 in tax. You can't pay $0 tax and get a $7,500 refund. I don't believe there is a max income, but someone will correct me if I'm wrong.

stephen.pace | December 12, 2012

Or if you pay $5k in tax, you can only claim $5k of the $7,500. I somehow don't think this limit is going to be much of an issue for Tesla buyers, though.

Brian H | December 13, 2012

Correct, but keep clear on the meaning of "pay tax"; that refers to total liability, before any payments made.

TheAustin | December 13, 2012

If you're paying less than $7,500 in taxes, you have no business buying a Tesla! That is, unless you're rolling Romney-style, and hiding income in foreign bank accounts, and coming up with crazy deductions and whatnot :p

TheAustin | December 13, 2012

(And, thanks for the clarification :)

jchangyy | December 13, 2012

You could be a retiree with little to no traditional income. then, you may not have that much in tax liability

sagebrushnw | December 13, 2012

If someone has a traditional IRA, they could convert part or all to a Roth IRA and the tax owed in the conversion would be covered by part or all of the $7,500 tax credit.