Electric Car Tax Ramifications

Did you know you can get up to $7,500 in Federal tax credits for buying a new electric car? That explains why we have seen all those Teslas on the road lately. Not only that, electric cars don’t pay any of the 18.4 cents per gallon Highway Trust Fund. Not to mention the 31 cents, on average, each state adds per gallon of gas.

However, it may be coming to an end. Each car manufacturer can only offer a tax credit on 200,000 cars and Tesla is reaching its limit.

At least five states have special fees on electric vehicles: Colorado, Nebraska, North Carolina, Virginia and Washington. However, they’re minimal.

Just remember, the tax credit is only available to the buyer if the electric vehicle is purchased. If you lease an electric vehicle, the leasor receives the tax credit, typically causing them to reduce the leasee’s monthly payments.