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Internal Revenue Code, § 30D. New Qualified Plug-In Electric Drive Motor Vehicles

I.R.C. § 30D(a) Allowance of Credit
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year.
I.R.C. § 30D(b) Per Vehicle Dollar Limitation
I.R.C. § 30D(b)(1) In General
The amount determined under this subsection with respect to any new qualified plug-in electric drive motor vehicle is the sum of the amounts determined under paragraphs (2) and (3) with respect to such vehicle.
I.R.C. § 30D(b)(2) Base Amount
The amount determined under this paragraph is $2,500.
I.R.C. § 30D(b)(3) Battery Capacity
In the case of a vehicle which draws propulsion energy from a battery with not less than 5 kilowatt hours of capacity, the amount determined under this paragraph is $417, plus $417 for each kilowatt hour of capacity in excess of 5 kilowatt hours. The amount determined under this paragraph shall not exceed $5,000.
I.R.C. § 30D(c) Application With Other Credits
I.R.C. § 30D(c)(1) Business Credit Treated As Part Of General Business Credit
So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).
I.R.C. § 30D(c)(2) Personal Credit
For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
I.R.C. § 30D(d) New Qualified Plug-In Electric Drive Motor Vehicle
For purposes of this section—
I.R.C. § 30D(d)(1) In General
The term “new qualified plug-in electric drive motor vehicle” means a motor vehicle—
I.R.C. § 30D(d)(1)(A)
the original use of which commences with the taxpayer,
I.R.C. § 30D(d)(1)(B)
which is acquired for use or lease by the taxpayer and not for resale,
I.R.C. § 30D(d)(1)(C)
which is made by a manufacturer,
I.R.C. § 30D(d)(1)(D)
which is treated as a motor vehicle for purposes of title II of the Clean Air Act,
I.R.C. § 30D(d)(1)(E)
which has a gross vehicle weight rating of less than 14,000 pounds, and
I.R.C. § 30D(d)(1)(F)
which is propelled to a significant extent by an electric motor which draws electricity from a battery which—
I.R.C. § 30D(d)(1)(F)(i)
has a capacity of not less than 4 kilowatt hours, and
I.R.C. § 30D(d)(1)(F)(ii)
is capable of being recharged from an external source of electricity.
I.R.C. § 30D(d)(2) Motor Vehicle
The term “motor vehicle” means any vehicle which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails) and which has at least 4 wheels.
I.R.C. § 30D(d)(3) Manufacturer
The term “manufacturer” has the meaning given such term in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).
I.R.C. § 30D(d)(4) Battery Capacity
The term “capacity” means, with respect to any battery, the quantity of electricity which the battery is capable of storing, expressed in kilowatt hours, as measured from a 100 percent state of charge to a 0 percent state of charge.
I.R.C. § 30D(e) Limitation On Number Of New Qualified Plug-In Electric Drive Motor Vehicles Eligible For Credit
I.R.C. § 30D(e)(1) In General
In the case of a new qualified plug-in electric drive motor vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed.
I.R.C. § 30D(e)(2) Phaseout Period
For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after December 31, 2009, is at least 200,000.
I.R.C. § 30D(e)(3) Applicable Percentage
For purposes of paragraph (1), the applicable percentage is—
I.R.C. § 30D(e)(3)(A)
50 percent for the first 2 calendar quarters of the phaseout period,
I.R.C. § 30D(e)(3)(B)
25 percent for the 3d and 4th calendar quarters of the phaseout period, and
I.R.C. § 30D(e)(3)(C)
0 percent for each calendar quarter thereafter.
I.R.C. § 30D(e)(4) Controlled Groups
Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.
I.R.C. § 30D(f) Special Rules
I.R.C. § 30D(f)(1) Basis Reduction
For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed (determined without regard to subsection (c)).
I.R.C. § 30D(f)(2) No Double Benefit
The amount of any deduction or other credit allowable under this chapter for a vehicle for which a credit is allowable under subsection (a) shall be reduced by the amount of credit allowed under such subsection for such vehicle (determined without regard to subsection (c)).
I.R.C. § 30D(f)(3) Property Used By Tax-Exempt Entity
In the case of a vehicle the use of which is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such vehicle to the person or entity using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such vehicle (determined without regard to subsection (c)). For purposes of subsection (c), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation
I.R.C. § 30D(f)(4) Property Used Outside United States Not Qualified
No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1).
I.R.C. § 30D(f)(5) Recapture
The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit.
I.R.C. § 30D(f)(6) Election Not To Take Credit
No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects to not have this section apply to such vehicle.
I.R.C. § 30D(f)(7) Interaction With Air Quality And Motor Vehicle Safety Standards
A vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with—
I.R.C. § 30D(f)(7)(A)
the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and
I.R.C. § 30D(f)(7)(B)
the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code.
I.R.C. § 30D(g) Credit Allowed For 2- And 3-Wheeled Plug-In Electric Vehicles
I.R.C. § 30D(g)(1) In General
In the case of a qualified 2- or 3-wheeled plug-in electric vehicle—
I.R.C. § 30D(g)(1)(A)
there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the applicable amount with respect to each such qualified 2- or 3-wheeled plug-in electric vehicle placed in service by the taxpayer during the taxable year, and
I.R.C. § 30D(g)(1)(B)
the amount of the credit allowed under subparagraph (A) shall be treated as a credit allowed under subsection (a).
I.R.C. § 30D(g)(2) Applicable Amount
For purposes of paragraph (1), the applicable amount is an amount equal to the lesser of—
I.R.C. § 30D(g)(2)(A)
10 percent of the cost of the qualified 2- or 3- wheeled plug-in electric vehicle, or
I.R.C. § 30D(g)(3) Qualified 2- Or 3-Wheeled Plug-In Electric Vehicle
The term “qualified 2- or 3-wheeled plug-in electric vehicle” means any vehicle which—
I.R.C. § 30D(g)(3)(A)
has 2 or 3 wheels,
I.R.C. § 30D(g)(3)(B)
meets the requirements of subparagraphs (A), (B), (C), (E), and (F) of subsection (d)(1) (determined by substituting “2.5 kilowatt hours” for “4 kilowatt hours” in subparagraph (F)(i)),
I.R.C. § 30D(g)(3)(C)
is manufactured primarily for use on public streets, roads, and highways,
I.R.C. § 30D(g)(3)(D)
is capable of achieving a speed of 45 miles per hour or greater, and
I.R.C. § 30D(g)(3)(E)
is acquired—
I.R.C. § 30D(g)(3)(E)(i)
after December 31, 2011, and before January 1, 2014, or
I.R.C. § 30D(g)(3)(E)(ii)
in the case of a vehicle that has 2 wheels, after December 31, 2014, and before January 1, 2021.
(Added by Pub. L. 110-343, div. B, title II, Sec. 205(a), Oct. 3, 2008, 122 Stat. 3765; and amended by Pub. L. 111-5, div. B, title I, Sec. 1141(a), Feb. 17, 2009, 123 Stat. 115; Pub. L. 111-148, Sec. 10909(b)(2)(H), Mar. 23, 2010, 124 Stat. 119; Pub. L. 112-240, title I, Sec. 104(c)(2)(I), title IV, Sec. 403, Jan. 2, 2013, 126 Stat. 2313; Pub. L. 113-295, Div. A, title II, Sec. 209(e), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-113, Div. Q, title I, Sec. 183(a); Pub. L. 115-123, Div. D, title I, Sec. 40405(a), Feb. 9, 2018, 132 Stat. 64; Pub. L. 116-94, Div. Q, title I, Sec. 126, Dec. 20, 2019.)
BACKGROUND NOTES
AMENDMENTS
2019 - Subsec. (g)(3)(E )(ii). Pub. L. 116-94, Div. Q, Sec. 126(a), amended clause (ii) by substituting “January 1, 2021” for “January 1, 2018”.
2018 - Subsec. (g)(3)(E)(ii). Pub. L. 115-123, Sec. 40405(a), amended clause (ii) by substituting ‘‘January 1, 2018’’ for ‘‘January 1, 2017’’.
2015 - Subsec. (g)(3)(E). Pub. L. 114-113, Div. Q, Sec. 183(a), amended subpar. (E) by substituting “acquired—(i) after December 31, 2011, and before January 1, 2014, or (ii) in the case of a vehicle that has 2 wheels, after December 31, 2014, and before January 1, 2017.’’ for “acquired after December 31, 2011, and before January 1, 2014.”
2014 - Subsec. (f)(1). Pub. L.113-295, Div. A, Sec. 209(e)(1)(A), amended par. (1) by inserting “(determined without regard to subsection (c))” before the period at the end.
Subsec. (f)(2). Pub. L. 113-295, Div. A, Sec. 209(e)(1)(B), amended par. (2) by inserting “(determined without regard to subsection (c))” before the period at the end.
Subsec. (f)(3). Pub. L. 113-295, Div. A, Sec. 209(e)(2), amended par. (3) by inserting “For purposes of subsection(c), property to which this paragraph applies shall be treated as of a character subject to an allowance for depreciation.” at the end.
2013 - Subsec. (c)(2). Pub. L. 112-240, Sec. 104(c)(2)(I), amended par. (2). Before amendment, it read as follows:
“(2) Personal Credit.—
“(A) In General.—For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
“(B) Limitation Based On Amount Of Tax.—In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of—
“(i) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
“(ii) the sum of the credits allowable under subpart A (other than this section and sections 23 and 25D) and section 27 for the taxable year.”
Subsec. (f)(2). Pub. L. 112-240, Sec. 403(b)(1), amended par. (2) by substituting “vehicle for which a credit is allowable under subsection (a)” for “new qualified plug-in electric drive motor vehicle” and by substituting “allowed under such subsection” for “allowed under subsection (a)”.
Subsec. (f)(7). Pub. L. 112-240, Sec. 403(b)(2), amended par. (7) by substituting “vehicle” for “motor vehicle”.
Subsec. (g). Pub. L. 112-240, Sec. 403(a), added subsec. (g).
2010 - Subsec. (c)(2)(B)(ii). Pub. L. 111-148, Sec. 10909(b)(2)(H), amended clause (ii) by substituting “section” for “sections 23 and”.
2009 - Pub. L. 111-5, Div. B, Sec. 1141(a), amended Sec. 30D. Before amendment, it read as follows:
“Sec. 30D. New Qualified Plug-In Electric Drive Motor Vehicles
“(a) Allowance of Credit.—
“(1) In General.— There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable amount with respect to each new qualified plug-in electric drive motor vehicle placed in service by the taxpayer during the taxable year.
“(2) Applicable Amount.— For purposes of paragraph (1), the applicable amount is sum of—
“(A) $2,500, plus
“(B) $417 for each kilowatt hour of traction battery capacity in excess of 4 kilowatt hours.
“(b) Limitations.—
“(1) Limitation Based on Weight.— The amount of the credit allowed under subsection (a) by reason of subsection (a)(2) shall not exceed—
“(A) $7,500, in the case of any new qualified plug-in electric drive motor vehicle with a gross vehicle weight rating of not more than 10,000 pounds,
“(B) $10,000, in the case of any new qualified plug-in electric drive motor vehicle with a gross vehicle weight rating of more than 10,000 pounds but not more than 14, 000 pounds,
“(C) $12,000, in the case of any new qualified plug-in electric drive motor vehicle with a gross vehicle weight rating of more than 14,000 pounds but not more than 26,000, and
“(D) $15,000, in the case of any new qualified plug-in electric drive motor vehicle with a gross vehicle weight rating of more than 26,000 pounds.
“(2) Limitation On Number of Passenger Vehicles and Light Trucks Eligible for Credit.—
“(A) In General.— In the case of a new qualified plug-in electric drive motor vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed.
“(B) Phaseout Period.— For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the total number of such new qualified plug-in electric drive motor vehicles sold for use in the United States after December 31, 2008, is at least 250,000.
“(C) Applicable Percentage.— For purposes of subparagraph (A), the applicable percentage is—
“(i) 50 percent for the first 2 calendar quarters of the phaseout period,
“(ii) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and
“(iii) 0 percent for each calendar quarter thereafter.
“(D) Controlled Groups Rules similar to the rules of section 30B(f)(4) shall apply for purposes of this subsection.
“(c) New Qualified Plug-In Electric Drive Motor Vehicle.— For purposes of this section, the term “new qualified plug-in electric drive motor vehicle” means a motor vehicle—
“(1) which draws propulsion using a traction battery with at least 4 kilowatt hours of capacity,
“(2) which uses an offboard source of energy to recharge such battery,
“(3) which, in the case of a passenger vehicle or light truck which has a gross vehicle weight rating of not more than 8,500 pounds, has received a certificate of conformity under the Clean Air Act and meets or exceeds the equivalent qualifying California low emission vehicle standard under section 243(e)(2) of the Clean Air Act for that make and model year, and
“(A) in the case of a vehicle having a gross vehicle weight rating of 6,000 pounds or less, the Bin 5 Tier II emission standard established in regulations prescribed by the Administrator of the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make and model year vehicle, and
“(B) in the case of a vehicle having a gross vehicle weight rating of more than 6,000 pounds but not more than 8,500 pounds, the Bin 8 Tier II emission standard which is so established,
“(4) the original use of which commences with the taxpayer,
“(5) which is acquired for use or lease by the taxpayer and not for resale, and
“(6) which is made by a manufacturer.
“(d) Application with Other Credits.—
“(1) Business Credit Treated as Part of General Business Credit.— So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)).
“(2) Personal Credit.—
“(A) In General.— For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.
“(B) Limitation Based on Amount of Tax.— In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall not exceed the excess of—
“(i) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over
“(ii) the sum of the credits allowable under subpart A (other than this section and sections 23 and 25D) and section 27 for the taxable year.
“(e) Other Definitions and Special Rules.— For purposes of this section—
“(1) Motor Vehicle The term ‘motor vehicle’ has the meaning given such term by section 30(c)(2).
“(2) Other Terms The terms ‘passenger automobile’, ‘light truck’, and ‘manufacturer’ have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of the administration of title II of the Clean Air Act (42 U.S.C. 7521 et seq.).
“(3) Traction Battery Capacity.— Traction battery capacity shall be measured in kilowatt hours from a 100 percent state of charge to a zero percent state of charge.
“(4) Reduction in Basis.— For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed.
“(5) No Double Benefit.— The amount of any deduction or other credit allowable under this chapter for a new qualified plug-in electric drive motor vehicle shall be reduced by the amount of credit allowed under subsection (a) for such vehicle for the taxable year.
“(6) Property Used by Tax-Exempt Entity.— In the case of a vehicle the use of which is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such vehicle to the person or entity using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such vehicle (determined without regard to subsection (b)(2)).
“(7) Property Used Outside United States, Etc., Not Qualified.— No credit shall be allowable under subsection (a) with respect to any property referred to in section 50(b)(1) or with respect to the portion of the cost of any property taken into account under section 179.
“(8) Recapture.— The Secretary shall, by regulations, provide for recapturing the benefit of any credit allowable under subsection (a) with respect to any property which ceases to be property eligible for such credit (including recapture in the case of a lease period of less than the economic life of a vehicle).
“(9) Election To Not Take Credit.— No credit shall be allowed under subsection (a) for any vehicle if the taxpayer elects not to have this section apply to such vehicle.
“(10) Interaction With Air Quality and Motor Vehicle Safety Standards.— Unless otherwise provided in this section, a motor vehicle shall not be considered eligible for a credit under this section unless such vehicle is in compliance with—
“(A) the applicable provisions of the Clean Air Act for the applicable make and model year of the vehicle (or applicable air quality provisions of State law in the case of a State which has adopted such provision under a waiver under section 209(b) of the Clean Air Act), and
“(B) the motor vehicle safety provisions of sections 30101 through 30169 of title 49, United States Code.
“(f) Regulations.—
“(1) In General.— Except as provided in paragraph (2), the Secretary shall promulgate such regulations as necessary to carry out the provisions of this section.
“(2) Coordination in Prescription of Certain Regulations.— The Secretary of the Treasury, in coordination with the Secretary of Transportation and the Administrator of the Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether a motor vehicle meets the requirements to be eligible for a credit under this section.
“(g) Termination.— This section shall not apply to property purchased after December 31, 2014.”
EFFECTIVE DATE OF 2019 AMENDMENTS
Amendments by Pub. L. 116-94, Div. Q, Sec. 126, applicable to vehicles acquired after December 31, 2017.
EFFECTIVE DATE OF 2018 AMENDMENT
Amendment by Pub. L. 115-123, Sec. 40405(a), effective for vehicles acquired after December 31, 2016.
EFFECTIVE DATE OF 2015 AMENDMENT
Amendment by Pub. L. 114-113, Div. Q, Sec. 183(a), effective for vehicles acquired after December 31, 2014.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 209(e), effective as if included in the provision of the American Recovery and Reinvestment Tax Act of 2009 [Pub. L. 111-5, Sec. 1141] to which it relates [Effective for vehicles acquired after Dec. 31, 2009].
EFFECTIVE DATE OF 2013 AMENDMENTS
Amendment by Sec. 104(c) of Pub. L. 112-240 effective for taxable years beginning after December 31, 2011.
Amendments by Sec. 403(b) of Pub. L. 112-240 effective for vehicles acquired after December 31, 2011.
EFFECTIVE DATE OF 2010 AMENDMENT
Amendment by Sec. 10909(b) of Pub. L. 111-148 effective for taxable years beginning after December 31, 2009. Pub. L. 111-148, Sec. 10909(c), as amended by Pub. L. 111-312, Sec. 101(b), provided that:
“(c) SUNSET PROVISION.—Each provision of law amended by this section is amended to read as such provision would read if this section had never been enacted. The amendments made by the preceding sentence shall apply to taxable years beginning after December 31, 2011.”
EFFECTIVE DATE OF 2009 AMENDMENT
Amendment by Sec. 1141(a) of Pub. L. 111-5, Div. B, effective for vehicles acquired after December 31, 2009.
EFFECTIVE DATE
Effective for taxable years beginning after December 31, 2008.