After reading about this yesterday, I thought, "Unbelievable, taxpayers paying for golf cart purchases." Then I thought, "Nah, situation normal, another unintended consequence from government stimulus intervention."
As part of the Emergency Economic Stabilization Act (ESSA) and the American Recovery and Reinvestment Act (ARRA), two tax credits were created for plug-in electric cars, which includes neighborhood electric vehicles (NEVs). The ESSA tax credit is between $2,500 to $7,500, up to 100% the cost of the vehicle, which expires December 31, 2009. The ARRA tax credit is a maximum of $2,500 or 10% of the vehicle cost, whichever is lower, and expires December 31, 2011. Here is the IRS list of vehicles eligible for the tax credit.
Interestingly, as pointed out in Golf car credit controversy, by Kay Bell, golf carts can qualify as NEVs, if they include required safety features to make them street legal, such as side/rearview mirrors, headlights and three-point seatbelts. Although, the ESSA tax credit typically offsets about 1/2 to 2/3's of the golf car price, one manufacturer has price their golf car at $6496.53, which is precisely the amount of the tax credit. Hence, a free golf car, courtesy of a government stimulus bill.
What will the politicians think of next? Perhaps the health care reform bill will include a exercise tax credit for buying golf equipment and playing golf, making the sport a benefit that is entirely supported by government and taxpayer funds :-)
For more on Reflections and Musings, check back every Friday for a new segment.
This is not financial or transportation advice. Please consult a professional advisor.
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1 comment:
It is my understanding that golf cars modified to be low speed vehicles (LSVs) do not qualify for these tax credits. Only vehicles purposely designed and built as LSVs qualify i.e. they leave the manufacturer as a certified LSV. The trend in LSV development is to move away from golf cars in both appearance and underlying construction of the vehicle. The fact is, there is a niche market for these vehicles as second vehicles where they replace full size gas powered vehicles. If the goal of the policy is to reduce gas consumption and promote the use of electric powered vehicles then it is working. By the way, over the next decade the US Armed Forces expect to purchase in the neighborhood of 30,000 of these vehicles to reduce fuel costs.
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