Quote:
Originally Posted by 90503
"Leased vehicle loophole"...?
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Commercial vehicles are treated differently than passenger vehicles.
Passenger vehicles have to be built in North America to qualify. Commercial vehicles don’t.
Passenger vehicles have to be priced at or below $55,000 for cars, $80,000 for utilities and pick ups. Commercial vehicles don’t have those restrictions.
Passenger vehicles have to have specific battery components (anodes and cathodes) produced in the US or a Free Trade partner country to qualify for $3,750 and have minerals sourced from or processed in the US or a Free Trade partner country for the other $3,750. Commercial vehicles don’t.
Buyers of passenger vehicles that pass the above qualifications must have household income not exceeding $150,000 for a taxpayer filing Single, $225,000 for a taxpayer filing Head of Household, $300,000 for a taxpayer filing Married, Joint. Buyers of commercial vehicles don’t.
Now the loophole…
Treasury defines a Commercial Vehicle to be a vehicle used by an entity for the sole purpose of generating revenue. If you are a leasing company, the vehicles that you buy and own for the purpose of leasing to individuals (generating revenue) are by definition Commercial Vehicles. The leasing company gets the incentive, not the person leasing the vehicle from the leasing company. They can choose to pass all, part, or none of the incentive value on to the leasing customer.
So how’s that work?
If I
buy a Cadillac Lyriq and it stickers at $79,000 and our household income is less than $300k, we would qualify for a $7,500 tax incentive.
If I
lease a $153,000 Porsche Taycan Turbo that is made in Stuttgart, Germany, the leasing company I lease it from gets a $7,500 tax incentive. They can put it in their pocket or they can reduce the price of the car that I lease from them or they can use it to improve the lease terms. Their call.