Summary#
The 21st Century Vehicle Choice Act would create federal reporting duties and amend the Internal Revenue Code of 1986. It would increase and make permanent three clean-vehicle-related tax credits, while limiting the new clean-vehicle credit to one use per taxpayer. Its stated goal is to report on vehicle choice, costs, critical minerals and charging stations.
- The Commerce Secretary must report on the number of new vehicle varieties and trends in vehicle prices and ownership costs within 180 days.
- The Energy Secretary must report on critical minerals for clean-vehicle technologies every year for six years, consulting the named federal officials and agencies.
- Energy and Transportation must study where “gasoline super-users” are concentrated and identify 100 commonly used routes in those regions; later reports must track charging-station availability and use there.
- For new clean vehicles, the bill raises each of two credit components from $3,750 to $7,500. If both components qualify, the maximum would be $15,000. But a taxpayer who receives this credit once could not receive it again, and the income limits would be lowered.
- For previously owned clean vehicles, it raises the credit’s dollar cap from $4,000 to $8,000 and the percentage used in its calculation from 30% to 60%. It also raises the alternative-fuel refueling property credit’s percentage from 30% to 50%. Both credits would be made permanent.
What it means for you#
- New clean-vehicle buyers: The credit could be larger, but each taxpayer could use it only once. The bill lowers the income thresholds to $225,000, $169,000 and $112,500; the full eligibility rules are not included in the supplied material.
- Previously owned clean-vehicle buyers: The calculation and maximum credit would increase, but the bill does not remove other eligibility rules.
- People or businesses installing alternative-fuel refueling property: The credit percentage would rise. The bill does not remove other rules or limits for qualifying property.
- Federal agencies: Commerce, Energy and Transportation would have to produce the reports described above. The Energy Secretary’s reports on minerals also require consultation with other named agencies and the U.S. Trade Representative.
- Vehicle owners generally: The bill would not require anyone to buy a particular type of vehicle, change vehicle production, or require charging stations to be built.
- Everyone: This is an introduced bill, not law. Whether it will pass is uncertain.
Money#
No cost estimate is available in the supplied material.
- Larger and permanent tax credits could increase federal tax expenditures (revenue given up through tax credits); the amount is not stated.
- Federal agencies would have to prepare reports, but the bill gives no staffing or cost figures.
- The bill does not set a fee or fine.
What is unclear#
- The parent Internal Revenue Code provisions were not supplied, so the full current eligibility rules, other credit limits and how these changes interact with them could not be verified.
- The bill does not explain how agencies must gather or protect the data used to estimate gasoline use, or how that estimate would account for different owners’ driving.
- It does not set detailed methods, measures of success or oversight for the required reports.
- The bill does not specify the resources or funding agencies must use to complete the reports.
Case for#
- A possible argument for the bill is that larger credits could reduce the purchase or installation cost for people who qualify.
- Reporting on vehicle variety, purchase prices and ownership costs could give Congress information about the choices available to buyers.
- Reports on charging stations and critical minerals could help Congress track infrastructure availability and supply needs.
Case against#
- The larger, permanent credits could reduce federal revenue, but the bill provides no estimate of that cost.
- The one-use limit means a taxpayer who receives the new-vehicle credit once would be barred from receiving it again, even if they later buy another qualifying vehicle.
- Lower income thresholds could make some taxpayers ineligible even as the credit amounts increase.
- The reports require information gathering but do not require action to address any problems they identify.