January 18, 2024 — Comments

These comments address concerns associated with EV tax credits and particularly those associated with transferability of the credit from consumers to dealers.

The comments raise concerns about the proposed rule which would limit the use of the used vehicle credit to only the first resale after the initial sale. We instead advocate that each car only be eligible for one used vehicle credit, but that credit could be used for subsequent sales if the initial sale is not eligible for the credit either because the price is too high to qualify or the income of the purchaser is too high to qualify.

We also advocate that the sale price used to determine eligibility for the used credit be the actual cost to the consumer, inclusive of add-ons excluding only government charges.

We also raise concerns about car buyers who transfer a credit to a dealer but then do not file a tax return or fail to file a Form 8936. Many households do not file a tax return or fail to claim a credit. Many seniors who only receive Social Security do not do so. As the IRS states in IRS TAX TIP 2001-8, TAXABILITY OF SOCIAL SECURITY BENEFITS, “Generally, if Social Security benefits were your only income, your benefits are not taxable and you probably do not need to file a federal income tax return.” We are concerned that eligible consumers who transfer a credit to a dealer would be subject to recapture in this situation.