Is there a tax credit for electric golf carts?

The IRS recently passed legislation extending the alternative motor vehicle tax credit available on certain qualified plug-in motor vehicles through January 1, . Under Section 30 of the Internal Revenue Code, qualified plug-in vehicles purchased between February 17, and December 31, could be eligible for a tax credit worth $2,500 or more.

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While a golf cart may be the first thing that pops into your head, the IRS has specifically defined exactly what kind of plug-in vehicle qualifies. The vehicle must:

• have at least four wheels;
• be manufactured primarily for use on public streets, roads and highways (not for off-road use like the typical golf cart);
• have a maximum speed between 20 and 25 miles per hour;
• must weigh less than 3,000 pounds;
• must be new with no previous owners, and
• must be acquired for use or lease by the taxpayer and not for resale.

So, what qualifies? Think of a golf cart with the works. It must have headlights, seat belts, parking brakes and driver&#;s side mirrors. These vehicles usually range between $8,000 and $20,000. For more specifics on vehicles that qualify, refer to Internal Revenue Code Section 30 on the IRS website.

The amount of the credit is based on the battery of the vehicle. The credit is worth $2,500 plus additional amounts for kilowatt-hour capacity. Simply stated, the longer the battery lasts on a single charge, the larger your credit could be. There is no limit on how many &#;golf cart credits&#; you can receive.

Before making any purchases, always do your homework. Check with the manufacturer to be sure that the vehicle has been certified. Ask to see the acknowledgement that the manufacturer received from the IRS and get a copy for your records. If you would like any further information on this topic, please contact Henssler Financial at 770-429- or .

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UIL: 30D.00-00

Release Date: 12/31/

Date: November 30,

Refer Reply To: CC:PSI:B06 - CONEX--09

The Honorable Richard G. Lugar

United States Senate

Washington, DC

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Attention: * * *

Dear Senator Lugar:

Thank you for your letter dated October 27, , on behalf of your constituents, * * * wrote about reports in the media that an electric golf cart qualifies for a tax rebate in excess of $ and that the law does not limit the number of golf carts a person can purchase.

Electric golf carts do not qualify for a tax credit. Taxpayers can take a credit for the purchase of new qualified plug-in electric drive motor vehicles. (Section 30D of the Internal Revenue Code). One of the requirements that a vehicle must meet to be eligible for the credit, is that the vehicle be manufactured primarily for use on public streets. Thus a "golf cart," which is manufactured primarily for off-road use, such as on a golf course, is not eligible for the 30D credit. Another requirement is that the vehicle be able to reach a speed of 20 miles per hour on level pavement. Most golf carts cannot attain that speed. Media reports describing a tax credit for purchasers of golf carts are erroneous.

Notice -54 provides a mechanism for manufacturers to certify that a particular make, model, and model year vehicle meets the requirements of section 30D. A manufacturer who chooses to certify a vehicle must certify, under penalties of perjury, that the vehicle meets all of the requirements of section 30D. In particular, the manufacturer must certify both that the vehicle is manufactured primarily for use on public streets, and that the vehicle is not manufactured for off-road use, such as on a golf course. After a manufacturer makes all the necessary certifications, we issue a letter acknowledging these certifications, and a buyer can rely on the manufacturer's certification in purchasing the vehicle and taking the credit. If the media reports your constituent referred to concern vehicles that manufacturers have certified as satisfying section 30D, either the media reports are erroneous in describing the vehicles as golf carts or the manufacturers have improperly certified that the vehicles satisfy the requirements of section 30D. If the media reports refer to vehicles that their manufacturers have not certified as satisfying the requirements of section 30D, the media reports are erroneous either in describing the vehicles as golf carts or in stating that purchasers of the vehicles are entitled to the credit.

While we have not ruled on any aspect of the section 30D credit, the section does not limit either the number of vehicles a taxpayer may purchase, or to the amount of credit that a taxpayer may report as a consequence of the purchase of these vehicles. However, the credit is not refundable and the taxpayer may not claim it in any taxable year other than the one in which the taxpayer places the vehicle in service. Thus, the taxpayer may only receive a benefit to the extent of his or her income tax liability in the year in which the vehicle is placed in service.

I hope this information is helpful in responding to * * *. As you requested, I am replying in duplicate and returning the enclosure. Please contact me at * * * if I can be of further assistance.

Sincerely,

Charles B. Ramsey

Branch Chief, Branch 6

(Passthroughs & Special Industries)

(2)

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