Oklahoma EV Tax Credit Update

While the modern day version of the Oklahoma Land Rush ended in 2009, the legal dust related to the electric vehicle tax credits is still settling nearly two years later.  In early March an administrative law judge in the state issued a ruling allowing purchasers of Tomberlin LSVs in 2009 to receive income tax credits.  The Oklahoma Tax Commission is reviewing the decision.  Learn more:  Adaeveningnews.com

Dealer News

Arnell Auto Group A New GEM Dealer - Arnell Auto Group in Burns Harbor, IN recently became the only dealer for Global Electric Motorcars in Indiana.  The GEM line includes six vehicle models that operate on a chargeable 72-volt battery and can seat between two and six passengers.  David Arnell is the president of the Arnell Auto Group, which sells new and used vehicles, also sells Chevrolet, Chevrolet Commercial, Dodge, Chrysler, Jeep and Ram brands. Learn more:  NWItimes.com

North Shore Auto Group Provides Solar Charged Vehicles – North Shore Auto Group of Highland Park, IL has partnered with The Solar Electric Vehicle Company (SEVC) to provide solar-charged Cruise Car NEVs. The vehicles travel up to 60 miles on a single charge using a solar panel system that provides constant supplemental charging throughout the day.  The line-up of vehicles includes 4 and 6 passenger NEVs and multi-passenger shuttles, security and utility NEVs as well as solar-canopied golf carts.  Learn more:  EVworld.com

5 Star Mini Trucks To Market Chinese Brand - 5 Star Mini Trucks of Yukon, OK recently announced an exclusive contract with Shandong Liangzi Power Co. Ltd. of China to market their trucks and set up dealerships around the U.S.  The vehicles are street legal in Oklahoma except on highways and can travel 40 miles on a gallon of gasoline. Owner Rick Opitz said “...the partnership could also lead to an Oklahoma assembly plant or parts warehouse for the mini trucks.“  Learn more:  OKNews.com

Oklahoma Supreme Court Rules On Electric Vehicle Tax Credit

Oklahoma’s Supreme Court recently ruled that the Garfield County District Court, which had ruled in favor of LSV dealers and customers in October, did not have jurisdiction in the case and vacated that court’s order.  For dealers and customers this means that the Oklahoma Tax Commission’s previous letter rulings on qualified vehicles now apply again.  Some vehicles purchased with the understanding that they would be eligible for the state tax credit are no longer considered eligible.

It appears that the bulk of the rulings by the commission are not in favor of the manufacturers.  For example, the Badboy Buggie XT LSV, the Stealth Patriot LSV, the Fairplay EVE, Fairplay Goat, American Custom Golfcars Hummers H3, American Custom Golfcars Escalade, American Custom Golfcars Roadster Limo and Titan UTV Hunting Buggy do not qualify.  Per the commission they do not qualify because…

The term ‘qualified electric motor vehicle property’ shall not apply to vehicles known as ‘golf carts,’ ‘go-carts’ and other motor vehicles which are manufactured principally for use off the streets and highways.

Some of the vehicles that do qualify include:

• Most but not all Bigman models
• Club Car Carryall 2 & 6 LSVs
• Columbia ParCar Mega Truck models and Summit models with enclosures
• All the GEM models
• A few of the Star models
• Wheego Whip

The complete set of ruling letters for twenty-three manufacturers can be found here.  Learn more:  EdmondSun.com

Comment: When I first spoke with the Oklahoma Tax Commission after their initial ruling they  talked about trying to clarify the law and that revenue concerns were not the issue.  When they appealed the district court’s ruling they noted that the tax credit could cost the state upwards of $40 million. In my opinion they are trying to avoid losing revenue from tax credits. It would be interesting to see, in detail, how they are deciding which vehicles qualify and which ones don’t. – Marc Cesare

Oklahoma LSV Tax Credit Update

Yesterday a county judge in Oklahoma ruled in favor of vehicle purchasers, declaring that they could receive the state tax credit for the LSVs that they purchased.  The lawsuit was brought by Ada Electric Cars and H20 Sports Unlimited and other dealers joined as well including GKU Electric Vehicles LLC, Heartland Outdoors LLC, Pat’s Archery Inc., and Xtreme Cycle and ATV LLC.

The judge’s order states low-speed vehicles sold by manufacturers Tomberlin, Ruff & Tuff, Stealth, Fairplay and Bad Boy Buggie qualify for a state tax credit.  The order also includes, “any other low speed vehicles similarly equipped as those described above qualify for … ‘ the state tax credit. Specific models noted in the order include Tomberlin E-Merge E-2, Tomberlin E-Merge E-4, Tomberlin Anvil, Tomberlin E-Merge Classic, Ruff & Tuff NEV2, Ruff & Tuff NEV4, Ruff & Tuff Cruiser EV2, Ruff & Tuff Cruiser LX2, Ruff & Tuff Cruiser LX4, Ruff & Tuff Hunter 4×4, Stealth Patriot LSV, Stealth Patriot LSV 4 X 4, Fairplay EVE, Fairplay Goat and Bad Boy Buggie XT LSV.

The Oklahoma State Tax Commission responded to the announcement by stating that it would appeal the ruling.  The commission stated that the tax credits could cost the state more $40 million.  If this is true, at the high end an average tax credit of $8,000 per vehicle translates into 5,000 vehicles sold in the state and at the low end an average tax credit $4,000 per vehicle translates into 10,000 vehicles sold in the state. In either case the figures represent an enormous boost to the LSV market. – Marc Cesare

Learn more:  Enidnews.com Stilwater-newspress.com

Enidnews.com

Federal Tax Credit Appears To Be Significantly Boosting LSV Sales

Based on stories from around the country, the federal tax credit for new plug-in electric vehicles purchased during 2009 is providing a significant boost to LSV sales. The tax credit is included as part of the Emergency Economic Stabilization Act (EESA) and is credit of $2,500 to $7,500 for a four wheeled vehicle that draws propulsion using a rechargeable battery with at least four kilowatt hours of capacity. The base credit is $2,500 and increases depending on the size of the battery pack.  An additional $417 is added for each kilowatt hour above four kilowatts hours.  For many LSV this equates to a tax credit of roughly $4,000 to $6,000 depending on the brand of LSV and the battery pack option chosen.

A Tomberlin dealer in Oklahoma has reported a “dramatic” increase in sales, Bad Boy Buggies is hoping to launch their street legal vehicle shortly to take advantage of the tax credit fueled demand and in a recent story out of South Carolina a dealer reported a sales jump from 10 to 60 vehicles per month because of the tax credit.  South Carolina adds a state tax credit equal to 20% of the federal tax credit and Oklahoma adds a 50% tax credit for electric vehicles.  In addition, the major LSV manufacturers are all prominently touting the tax credit on their websites, often with the specific tax credit available for each model.  Learn more:  SCNow.com

Oklahoma Tax Commission Withdraws Tax Credit Ruling

The Oklahoma Tax Commission has withdrawn the ruling of September 17th that would have prohibited buyers of certain electric powered vehicles from qualifying for a substantial tax credit. Roger Gaddis, owner of Ada Electric Cars, sued the commission last week over the ruling. The reason for reversal, according to the tax commission, is that the ruling was meant to clarify the original ruling, but instead created more confusion. This is what spokesperson Paula Ross had told me about a week ago. Going forward tax credit qualifications will be based on the original rulings.  Learn more:  Edmondsun.com

Electric Vehicle Dealer Files Lawsuit After Oklahoma Tax Commission Issues Tax Credit Ruling

On Thursday the Oklahoma Tax Commission issued a ruling to “clarify” a tax credit for electric vehicles that has been in effect since the mid-nineties. According to the ruling, vehicles with golf cart or go-cart like bodies or principally designed for sporting or recreation purposes do not qualify for the state tax credit which amounts to 50% of the purchase price and can be spread over five years. Consumers who previously purchased vehicles this year expecting a tax credit may not receive one depending on which vehicle they purchased. As of yesterday the commission had qualified the Wheego and Club Car’s Carryall 2 and Carryall 6 models. Learn more: NewsOK.com

Dealer Roger Gaddis of Ada Electric Cars has filed a lawsuit to get the commission’s ruling revoked. Among the vehicles that Gaddis sells are purpose built LSVs from Tomberlin which, as of now, no longer qualify for the state tax credit, although they did so last year.

I spoke with Mr. Gaddis yesterday and he stated that vehicle owners, other dealers and OEMs have contacted him about turning the lawsuit into a class action. He suspects that the new ruling was made because of an unexpected surge in tax credits related to the vehicles and subsequent lost revenue for the state. Sales of these vehicle have increased significantly fueled by a federal tax credit for 2009 that also applies to LSVs. The combined federal and state tax credits can drop the cost of some vehicles to near zero.

In support of this suspicion Gaddis noted that a tax commissioner had contacted him and wanted to know how many vehicles he had sold. Gaddis responded by asking the commissioner what sales figures had to do with whether vehicles qualify for the tax credit or not. While Gaddis would not provide specific sales figures to the commissioner or myself he told me that sales had improved “dramatically” with the dual tax credits.

Mr. Gaddis also remarked that there has never been a vehicle qualification or certifying process for vehicles to qualify for the tax credit. If the vehicle met NHTSA’s LSV standards than they qualified. Furthermore he stated that the original purpose of the tax credit was to reduce the use of fossil fuels, reduce the use of foreign oil and encourage the use of environmentally friendly vehicles.

I have placed a call with the Oklahoma Tax Commission and hope to speak to them soon. Learn more: Forbes.com,

Learn more: Adaelectriccars.com

Update: I spoke with Paula Ross the spokesperson for the Oklahoma Tax Commission late today.  She said that the emergency ruling was prompted by the large number of requests by people asking if particular vehicles qualified for the state tax credit. Previously only a minimal number of people applied for the tax credit, approximately 100 in 2008. Although the commission is still compiling figures, the number is much higher this year and a greater variety of vehicles are involved than in previous years.  The ruling was meant to clarify the situation but as Ms. Ross noted, it may have caused more confusion.

Right now the commission is gathering data in hopes of understanding the market better and clarifying the situation.  The governor has 45 days to approve the ruling, and until that approval and more information is gathered, the tax commission will refrain from releasing a complete list of qualified vehicles.  Ms. Ross also remarked that the impact on revenue will not influence the qualification of vehicles but could be something addressed by the legislature for 2010. – Marc Cesare

MSV and Mini Truck State Laws

The Insurance Institute for Highway Safety has compiled information regarding medium speed vehicle (MSV) and mini-truck laws by state. According to the institute Kentucky, Montana, Minnesota, Oklahoma, Tennessee, Texas and Washington currently have MSV laws. Oregon’s law will go into effect at the end of September and Colorado has a law that will be triggered by the US DOT’s setting of MSV standards. The latter may not happen anytime soon:

In 2008 the National Highway Traffic Safety Administration (NHTSA) denied several petitions to create a new class of vehicles known as medium-speed vehicles (MSVs), which would have a top speed of 35 mph. The petitioners asked that MSVs be subject to a set of safety standards greater than those applied to low-speed vehicles (LSVs) but substantially less than those applied to conventional passenger cars. NHTSA denied the petition because unlike LSVs, which are permitted to have a top speed of 25 mph and are intended for use in controlled, low-speed communities, MSVs are traveling in higher risk traffic situations and should comply with all of the safety standards set for passenger cars.

Kentucky, Montana and Colorado’s laws allow for a top speed of 45 mph for MSVs while all the other states with laws allow for a top speed of 35 mph. Learn more: IIHS.org

The following states have mini-truck laws: Arkansas, Florida, Idaho, Illinois, Kansas, Louisiana, Maine, Minnesota, Missouri, North Dakota, Oklahoma, Tennessee, Utah, and Wyoming. There is more variance in the laws for these vehicles since states classify them differently. Some are classified as mini trucks or mini utility trucks and others as utility vehicles, off highway vehicles, or even LSVs or MSVs since some mini trucks are speed restricted although many can go 45 to 55 mph. Top speeds allowed by the vehicles vary from 25 mph to a high of 55 mph, and the types of roads they can be used on vary as well. Learn more: IIHS.org

AMP Control Of Oklohoma To Assemble & Sell Wheego LSVs

AMP Control of Piedmont, OK has an agreement to assemble and sell Wheego Electric Car’s LSVs. According to Wheego management a significant factor in making this move was the sizable state tax credit for electric vehicles in Oklahoma. Wheego CEO Mike McQuary states that

…the Wheego Whip LSV qualifies for a state tax credit of 50 percent of the purchase price of the vehicle, which is $18,995, as well as a $7,500 federal tax credit.

A news conference on the agreement is scheduled for tomorrow Learn more: kfsm,com (5 News)

Tiger Truck Lands $11M Air Force Contract

Tiger Truck Vehicle line

Tiger Truck of Oklahoma recently won an $11 million GSA contract to supply the US Air Force with 863 mini-trucks.  The purchase is funded by the recent federal stimulus package since the mini-trucks will be replacing less fuel-efficient vehicles.  All the vehicles will be fueled by either gas or a gas/ethanol mix and are slated for delivery in about four months.  The recently opened Tiger Truck assembly plant employs 90 people and can produce approximately 35 vehicles per shift per day.  The company assembles the vehicles from a mix of US and foreign sourced parts.  Learn more:  www.newsok.com