Why NM Legislators Should Vote for SB 2 – HB 217
Summary: SB 2 - HB 217 seeks to incentivize the purchase or lease of NEW plug-in hybrid electric vehicles (PHEV) and 100 percent battery electric vehicles (BEV) and charging units by providing income tax credits. The bill also requires an additional annual registration fee for these vehicles ($50 for BEVs and $20 for PHEVs), to be distributed to the state road fund. Credits would expire at the end of 2027.
The EV credit is $5,000 if the taxpayer has an adjusted gross income (AGI) of $50K or less (or other amounts depending on filing status). The credit drops to $2,500 if the taxpayer reports more than $50K AGI, again depending on filing status. So the benefit is higher for lower-income taxpayers. The total funding of the EV credit is $10M. If a taxpayer does not have $5,000 (or $2,500) in tax liability, they still get the full amount. The charging unit credit is $300. The total funding of the charging unit credit is $1.0M.
PHEVs and BEVs must meet these requirements: Manufacturer Suggested Retail Price of $48K or less, battery capacity of 6 KW-hours or more, range (electric) of at least 15 miles, and charged from an external (plug-in) source.
History: SB 2 – HB 217 is similar to 2019’s SB 333 – HB 185, which died in committee. The major differences are the PHEV/BEV cap ($10M vs. $5M in 2019) and the proposed additional registration fees ($50/$20 vs. $25/$15 in 2019).
Why This Bill Is Good for NM
- This bill provides incentives to purchase environmentally-friendly electric transportation. Many cars are available that meet the definition. The transportation sector is responsible for 22% of New Mexico’s carbon emissions, and more EVs on our highways could lower that significantly over time.
- Other states (Colorado, Texas) have similar tax credits, and this would be as progressive as those.
- It can be argued that an additional registration fee is not needed (yet) because there are so few EVs on the road today. However, to be fair, some EV owners are okay with paying an additional $50 or $25 a year because they purchase less gasoline, or NO gasoline. It should be noted that heavy transport trucks do much more damage to the roads than an EVs.
- The registration fee was increased from $25 to $50 in this bill to make it more “fair” based on gas car mileage and miles driven.
- A committee member in last year’s legislative session asked “How is this not a tax credit for the wealthy?” Answer: because it benefits low-income ($<$50K AGI) taxpayers more, and the MSRP of the car is capped at $48K, restricting its application to lower value cars.
Renewable Taos, New Energy Economy, Sierra Club