Here's Every Car-Related Tax Break Congress Included In The New Budget

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Last month, President Donald Trump signed a budget passed by Congress that ended a brief government shutdown. As part of the 652-page budget bill, Congress extended several temporary car-related tax breaks, which The Center for Public Integrity highlighted in a massive investigation published Wednesday. You will probably care about some of this.

The Center’s investigation looked at more than 30 “tax extenders”—which the news outlet described as “legislative favors, often slipped into folds of federal bills notable for funding bigger-ticket items—such as military programs, disaster relief, infrastructure overhauls.” A more appropriate name, the Center says, is “tax cut extenders,” because in reality they extend the duration of temporary tax cuts.


By examining the provisions, the Center said it found they typically “benefit narrow special interests that know how to work the system — from race horse owners to StarKist tuna canners to connoisseurs of two-wheeled electric vehicles.”

Here’s some of the car-related provisions that were included.


NASCAR’s attendance and television ratings have taken a hit in recent years, so, as part of the budget, speedways got some help.


The provision lets an estimated 1,200 racetracks write off taxes owed on improvements to facilities “at an accelerated rate,” the Center reports. The industry argues it benefits from having top-of-the-line tracks because it allows them to compete in the entertainment business. In total, track owners will benefit by an estimated $13 million this year.

Electric Vehicle Owners And Alternative Fuels

Anyone who buys an electric car really needs to have a charging setup at their home, if they want something quicker than a standard plug. One measure in the budget provides a 30 percent tax credit on costs for installing refueling equipment at a business or home, the Center reports, like a biodiesel pump or a charging plug.


The Congress’ Joint Committee on Taxation estimated the break will cost an estimated $49 million in lost tax revenue through 2018, according to the news outlet. The tax credit received attention from the auto industry; the Center notes that, Tesla, for instance, spent $740,000 lobbying on issues like the provision.

A trade group called Natural Gas Vehicles for America supported the measure because, the Center said, arguing the provision will bolster investment in alternative fuel trucks and benefit organizations that are relying on converted garbage trucks or buses that use natural gas. The provision was extended through this year.


Motorcycles And Three-Wheeled Vehicles

Another measure offers a 10 percent tax credit that’s capped at $2,500 for two-wheeled electric plug-in vehicles weighing less than 14,000 pounds, and are capable of traveling at least 45 miles per hour, the Center reports. The credit could result in lost tax revenue of a half-million dollars.

Companies that make electric vehicles whose customers could stand to benefit from such tax breaks include Zero Motorcycles, Arcimoto and Polaris Industries. The three all hired Duane Gibson of GovBiz Advantage to lobby Congress, paying his company $225,000 combined in 2017, according to lobbying records. He previously worked in Congress, including as a senior counsel to a House Transportation and Infrastructure subcommittee.


This provision also ends after this year.

Fuel Cell Vehicles

It’s still a fraction of the auto market, but automakers are devoting significant resources to hydrogen-powered vehicles, including Honda, Hyundai and Toyota. In the budget, Congress extended a tax credit that provides “dollar-for-dollar reductions in your tax bill” for anyone who purchased a fuel cell vehicle in 2017.

Thec redit is $4,000 for a qualified automobile weighing up to 8,500 pounds and more for heavier vehicles. The three manufacturers were among the groups that lobbied Congress to approve the so-called “tax extender,” which has been in use since 2014, when an existing law expired that had allowed tax credits for fuel cell vehicles purchased between 2006 and 2014.


The credit benefits automakers looking to sell alternative fuel cars, especially in states like California, which have mandates for automakers to sell such vehicles. Edward Cohen, Honda’s vice president for government and industry relations, told the Center that the credit only provides a minimal impact.

“We’re not making a lot of money off the tax credit,” Cohen told the news outlet. “These cars are hugely expensive to market in the early days.”


He’s apparently not kidding. Honda only has an estimated 100-200 fuel cell vehicles on the road today in the U.S., Chen told the Center.

The extension’s expected to cost about $4 million in lost revenue.

Alternative Fuel Sales

There’s another credit that benefits the alternative fuel industry. Called the Alternative Fuel Excise Tax Credit, the provision allows someone to recoup 50 cents a gallon on fuels like propane or natural gas “purchase or sold for motor vehicles use last year,” reports the Center.


Notably, it’s not exactly clear what constitues a motor vehicle. “What constitutes a motor vehicle is not explicitly defined; among the vehicles eligible for the credit are construction forklifts, according to some tax advisers,” the Center reports. By extending the credit one year, it’s projected to cost $555 million in revenue.

The Center’s entire investigation is incredibly insightful, and it’s well worth your time.