Ebike act and tax credit

December 6, 2021

Ebike Act tax credit, everything you need to know

Uncle Sam is concerned with climate change and has introduced an exciting new amendment to the 1986 tax code by way of an ebike act tax credit for ebike purchases. When the ebike act tax credit passes, it will offer an attractive incentive to potential ebike owners. The ebike act tax credit will subsidize the cost of a new ebike and incentivize bike enthusiasts choose an ebike over a moped or a motorcycle with a gas engine. Through innovative tax credits like the ebike act incentive more people will be able to do their part and lower their carbon footprint which helps to address our looming climate change crisis. Here are some details about the ebike act tax credit and how to qualify.

Ebike act tax credit deduction Info

The tax credit incentive included within the ebike act will give taxpayers who purchase an ebike up to 30% back of the retail price in the form of a tax credit. The maximum dollar amount for the tax credit is $1,500 per individual.

Ebike models that are priced at $8,000 or less would qualify for the proposed tax credit. The new bill would also add incentives to taxpayers who primarily commute via their ebike. Under the ebike act employers could also additionally reimburse employees up to $600 each year if they commute via traditional bicycle or ebike instead of car, bus, train or another petroleum-powered vehicle.

Are ebikes now tax free?

Ebike purchases are not tax free. Ebike purchases are subject to sales tax, depending on the state the buyer purchases the bike in. In some states there is no sales tax on any purchases, so an ebike may be a little cheaper. It should be noted that at Unconquered Customs, We take care of your US sales tax no matter what state you are in, and we deliver your custom ebike to your doorstep ready to ride

It should be noted that unlike mopeds, scooters and other gas-powered vehicles, ebike riders don't have to fuel up their ebikes with gasoline for each journey. Not having to purchase gas means ebike owners can save big on expensive gas taxes found at the pump.

Can you write off your ebike via the ebike act?

The ebike act was introduced in February of 2021 in Congress in the House and is set up via a tax credit mechanism. Two Democratic Congressmen, Jimmy Panetta and Earl Blumenauer, drew up the bill meant to encourage people to swap out their vehicle for an ebike for use on their daily commutes. Previously, ebikes buyers could not write their purchase off on their taxes, so the ebike act tax credit was necessary. The ebike act will allow all ebike buyers to receive an immediate tax credit at the time of their purchase.

It should be noted that on top of the ebike act tax credit at time of purchase - the current tax code already allows ebike owners who use their ebikes for their job to deduct expenses on their tax forms. Ebike messengers and delivery couriers may deduct the cost of their bike and their riding expenses each year if it's primarily for business use. Riders who use their bikes for their job may also be able to deduct maintenance, repair and other costs each year.

Ebike tax licensing and insurance

New ebike owners who wish to take advantage of the ebike act tax credit need to be familiar with their individual state laws regarding titling, licensing and insurance for ebikes. Each state has its own classification system for motorized vehicles, like ebikes. In some places, an ebike is defined as a certain classification of motorized bike and requires drivers to have a license. Alabama, Alaska and New Mexico are states that require licenses, insurance and registration documents for ebikes. Learn about your state here.

Most states have updated their laws for ebikes and reclassified them as separate from gas-powered vehicles. For example, Utah and Vermont are among the overwhelming majority of states where ebike riders don't have to register their vehicles or have a driver's license to operate them. Ebike riders also have to be aware of where their state laws provide for ebike riding on park trails and off-road areas.

The future of ebike ownership looks positively bright with the ebike act tax credit rumbling down the pipeline. The new tax credit will lower the cost of an ebike purchase and make your daily commute way more affordable and a lot more fun!

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