California Bill Seeks to Cut Green Car Sales Tax

California Bill Seeks to Cut Green Car Sales Tax

A law before the California Legislature is seeking to slash sales taxes on green cars in an effort to encourage more people to buy them.

The bill would cut sales taxed on hydrogen, electric, plug-in hybrid and compressed natural gas vehicles to 3.06 percent from the current 7.5 percent rate, the Los Angles Times reports. Sponsored by Assemblyman Phil Ting (D-San Francisco), the bill is Ting’s newest attempt to cut taxes on green cars. In 2013 he sponsored a bill with similar goals that ended up stalling because of concerns over funding.

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His proposed legislation would be in effect from 2016 to 2020 and would cost the state and estimated $92 million per year in lost tax revenue, but Ting says California’s cap-and-trade program now has enough money to cover the cost.

The lost revenue projection is based on an estimated 60,000 vehicle sales per year at an average transaction price of $34,725 per vehicle.

Governor Jerry Brown is calling for 1.5 million zero-emissions vehicles to be on California roads by 2025, but the LA Times reports that as of September, 2014, there were fewer than 134,000 green vehicles registered with the California Department of Motor Vehicles.

[Source: LA Times]

  • smartacus

    This is a crazy bad idea! Let me explain:

    If you install a $1000 plug-in device onto a $25,000 car, The lowering of the sales tax from 7.5% to 3.06% means the customer ends up paying less for a more expensive car!

    Everyone will be fitting their cars with tiny R/C car electric devices and passing them off as plug-in hybrids (Even if they go half a block before needing a recharge)

  • NinoNessuno

    How many ‘green’ cars does California currently sell annually?