US Congress lets $8,000 hydrogen vehicle tax credit expire

Mon, Dec 22 2014

When Toyota introduced the 2016 Mirai last month in preparation for a launch late next year, it said that the hydrogen car will have a $57,500 MSRP and that there will be a federal tax credit available worth up to $8,000. The problem, as we noted at the time, is that that federal credit was set to expire at the end of 2014. The technical language of the current rule says that someone who buys a fuel cell vehicle, "may claim a credit for the certified amount for a fuel cell vehicle if it is placed in service by the taxpayer after Dec. 31, 2005, and is purchased on or before Dec. 31, 2014." With the 113th Congress now finished up for the year and legislators headed home for the holidays, we know one thing for certain: the federal tax credit for hydrogen vehicles was not updated and will end as we're all singing Auld Lang Syne next week.

All of this isn't to say that Mirai buyers won't be able to take $8,000 off the price of the car 12 months from now. For proof of that, we only need to look at other alternative fuel tax incentives and realize that this Congress simply isn't moving fast enough to deal with things that are expiring right now. One of the last things that the 113th Congress did in December was to take up the tax credits that expired at the end of 2013 and renew some of them.

Jay Friedland, Plug In America's senior policy advisor, told AutoblogGreen that PIA and other likeminded organizations worked with Congress to extended the electronic vehicle charging station (technically: EVSE) tax credit that was part of the Alternative Refueling Tax Credit in IRS Section 30(C) through the end of 2014. "Individuals can deduct 30 percent of the cost of purchasing and installing an EVSE up to $1,000; businesses, 30 percent up to $30,000," he said. "This tax credit is applied to any system placed into service by 12/31/14 and is retroactive to the beginning of the year. So go out and buy your favorite EV driver an EVSE for the holidays," he said.

An electric motorcycle credit was killed at the last minute as Congress was getting ready to leave, but
H.R. 5771 did extend the Alternative Fuels Excise Tax Credits for liquefied hydrogen and other alternative fuels. These sorts of tax credit battles happen all year long. In July, Blumenthal introduced the Fuel Cell and Hydrogen Infrastructure Act of 2014, which never got out of the Finance Committee.

Back to the hydrogen vehicle situation. Robert Bienefeld, assistant vice president of Honda's Environment and Energy Policy, told AutoblogGreen that Honda wants the credit to be reinstated. Its hydrogen fuel cell vehicle is coming in early 2016, so it has more time than Toyota to get things sorted. "We are working with many partners on the legislative front to address this situation," he said. "We believe that legislators do not intend to pick winners and losers by providing tax credits to some technologies and not others. Many automakers believe that fuel cell vehicles are an essential part of the technology options we need to address ultra-low carbon transportation in the long run." Hyundai already sells the fuel-cell Tucson in California, but a spokesperson told AutoblogGreen that the company has no further comment on the tax credit situation at this time. There's no way we don't hear more about this in the year to come, though.

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By Sebastian Blanco