The City of Oklahoma City

Marty LawsonFleet Services DivisionManagement Specialist

Our Newest Additions

Tax Credits for Municipalities?

• 26 USC § 30D (f) (3), in part• …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…

How Does It Work?• Through an open disclosure agreement

the municipality passes their tax credit rights to the dealership

• The dealership offers the vehicle at a reduced price

• The dealership recovers the price reduction by filing a tax return

Tax Credit Disclosure Example

Successful bidder agrees to take the Internal Revenue Service (IRS) Qualified Plug-in Electric Drive Motor Vehicle Credit of $_____ on behalf of [Insert City Name] and will offer a purchase discount of $_____ for each Nissan Leaf electric vehicle purchased.

How Much Credit is Allowed?• Federal maximum is $7,500 per vehicle• $2,500 per vehicle, plus $417 for the first 5

kWh of battery capacity and $417 for every kWh over 5kWh

• Battery credit not to exceed $5,000• Maximum credit is reached at 16kWh• State credits will vary

Phaseout Period• Phaseout begins after 200,000 units sold

from the start date of December 31, 2009.• 50% for the 1st and 2nd calendar quarters• 25% for the 3rd and 4th calendar quarters• 0% for each quarter thereafter

The OKC Experience• Credit disclosure included in Bid Request• Pre-bid meeting included credit discussion• First round of bids rejected• Added tax references to re-advertised bid• Another pre-bid meeting with emphasis on

tax credit issues (not tax advise)

Perseverance Paid Off!

Things to Consider• Do some tax credit research ahead of time• Hold pre-bid meetings about tax credits• Provide a research appendix in the bid• Be prepared to reject your first offer• Consider making tax credit offers

mandatory in your bid specification

Research ReferencesThe following links are provided as references for research. These links are not provided as tax advice. IRS website:http://www.irs.gov/ USC Title 26, Section 30Dhttp://www.law.cornell.edu/uscode/text/26/30D General Information concerning IRC 30 and IRC 30Dhttp://www.irs.gov/businesses/article/0,,id=214841,00.html IRS Form 3800 General Business Credit Form and Instructionshttp://www.irs.gov/pub/irs-pdf/f3800.pdfhttp://www.irs.gov/pub/irs-pdf/i3800.pdf IRS Form 8936 Qualified Plug-in Electric Drive Motor Vehicle Credit Form and Instructionshttp://www.irs.gov/pub/irs-pdf/f8936.pdf IRS Allowed Nissan LEAF Credit Amounthttp://www.irs.gov/businesses/article/0,,id=230506,00.html Nissan Website for Tax Incentiveshttp://www.nissanusa.com/leaf-electric-car/index?dcp=ppn.63023881.&dcc=0.240189299#/leaf-electric-car/incentives/findIncentivesByZipCode/73102