Tax Credit Changes in new bill [LOCKED DUE TO POLITICS & ARGUING]

[R1Sky Business]

She was opposed to tax rate hikes on individuals and corporations but in support of a minimum corporate tax so if this is just a minimum tax she may be on board.

I'm sure she's really committed to her constituents....

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[jjswan33]

My experience has been, if it’s on the sticker it’s part of MSRP. Now if Rivian is selling them separately, then we’re good to go.

But Rivian is kinda screwed with the post March 1st pricing. They need to get that dual motor, shorter range model in production quickly.

Most likely it will be based on base MSRP. So if the base prices of the R1T is below the cap then all R1Ts will get it. It might get split by Explore/Adventure but that depends on the language.

The reason I find it unlikely they will use the actual MSRP of every vehicle is it would require extra documentation requirements. It will just be a lot easier if they can look at the VIN and say ok that’s this model car and qualifies.

At least this is how the OR rebate works. The price cap is $50k but for example a $65k EV6 qualifies because the base MSRP is below $50k.

 

[Sgt Beavis]

Hopefully Sinema blocks this

Absolutely not. It’s not perfect but it’s still a step in the right direction.

 

[McMoo]

What’s interesting is this will likely cause us not to buy a 2nd EV for a while due to the lost tax credits. No we don’t need government subsidies to afford them, but with 3 kids in daycare it would be nice!

 

[ads75]

Wonder if this will kill the max pack. Seems like there have been issues with it and now taking a 7500 hit to get one means it will get pushed out indefinitely.

Max pack isn't necessarily dead, especially for those who won't qualify based on income credits. That being said, if you are just outside the income limits, $10k for 100 miles can still hurt.

 

[SJ R1S]

Disclaimer: IANAL

But based on my understanding of this section, I really want to sign a binding written purchase agreement RFN.

I agree. This would leave a window where anyone who purchases an otherwise qualifying vehicle will not get any credit, regardless of whether they would qualify for a credit under the new law (as already pointed out, a refundable deposit like does not qualify as a binding contract). That window would be the period between the date of enactment (the date President Biden signs this into law) and 12/31/22 (the effective date of the new law)

This will likely drive folks who get schedule for delivery during that window, but would otherwise qualify for the credit to defer delivery to 2023. Obviously there could still be changes when this gets sent to the House, but it seems like this bill will be on a fast track for approval with Manchin being onboard now. Anyone who does not qualify for the new credit, either because of the income limit or MSRP, is otherwise out of luck as of the date this gets signed into law.

The purpose of this would be to avoid having individuals who will no longer qualify for the credit in the future rush out and buy electric vehicles before the new law takes effect, thus temporarily driving up demand. If correct, this seems odd given the lack of availability for pretty much any EV right now.

 

[Perry24r]

Does this basically destroy the Rivian + Xpel partnership? Or would the PPF not count in the MSRP?

America is truck and SUV heavy, those are expensive in EV form for the immediate future...They need to realize this and either remove cap or faze it in over 3-5 years.

Thought - wonder if companies look at the Vinfast battery subscription as a way around the MSRP cap?

 

[astonius]

Absolutely not. It’s not perfect but it’s still a step in the right direction.

If price and income caps are a step in the right direction I'll have what you're smoking.

 

[Sgt Beavis]

If price and income caps are a step in the right direction I'll have what you're smoking.

Whatever dude. The price cap barely impacts me and I just slipped under the income limit.
We have good weed in Colorado. Feel free to visit.

 

[astonius]

Whatever dude. The price cap barely impacts me and I just slipped under the income limit.
We have good weed in Colorado. Feel free to visit.

"It doesn't affect me negatively, so it's great!"

 

[Sgt Beavis]

"It doesn't affect me negatively, so it's great!"

Doesn’t negatively impact the vast majority of people. Add to that the fact that it’ll now be a point of sale rebate and it’s a big win for the vast majority of people. So yea, I’m totally good with it.

 

[SJ R1S]

Id say no because of the other text around what you copied. This section says that if you made a binding agreement before 12/31/2022 AND put it in service in 2023 that you MAY use the old rules. Since you bought in 2022, and how the law is written now, I bet you’d get the old rules rebate. Not the new one. But things can change.

The date of enactment would be the date the bill gets signed into law. Effective date for the new law is 12/31/22, so there will actually be a window where you don't get either, if I'm reading it right. Anyone who makes the purchase in 2022, but before the bill gets signed falls under the existing credit rules.

 

[COdogman]

Before everyone gets worked up about this in either direction (good/ bad), this bill is FAR from a done deal. No one knows where Sinema comes down on this and Manchin is a political windsock who could change his mind again if he wakes up on the wrong side of his house boat bed tomorrow morning. There is also no guarantee the moderate House democrats would go along with this.

My guess is this goes nowhere….again.

 

[astonius]

Doesn’t negatively impact the vast majority of people. Add to that the fact that it’ll now be a point of sale rebate and it’s a big win for the vast majority of people. So yea, I’m totally good with it.

I would hope the majority of people considering an $80k vehicle are making over $300k joint a year. If not they may want to reconsider their priorities.

 

[McMoo]

I would hope the majority of people considering an $80k vehicle are making over $300k joint a year. If not they may want to reconsider their priorities.

Speaking as a CPA, income is a terrible measure for incentives but an asset test is way too hard to implement so it’s the only “easy” way to do this. We have clients with tens of millions or hundreds of millions of assets whose income fluctuates year to year and there are years where they may have losses due to capital/equipment investments and bonus depreciation.

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