Lawmaker’s bill would give tax break to alternative fuel vehicles


A bill proposed by Torrance Assemblyman Al Muratsuchi would give a tax break to state residents who buy an alternative fuel vehicle.

Assembly Bill 1077 would change the way state sales taxes and vehicle license fees are assessed against cars that run on alternative sources of fuel.

The key change that the bill would make: taxes and fees would not be calculated until incentives such as federal income tax credits and state purchase rebates have reduced the cost of alternative fuel vehicles by thousands of dollars.


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Currently, the fees and taxes are assessed on the alternative fuel cars before those credits and rebates are taken into account.

The federal government offers a $7,500 income tax credit to buyers of electric cars, and California provides a separate $2,500 rebate. The sales tax that would be exempted would save buyers about $875, depending on where they live.

Muratsuchi said his bill would help make alternative fuel vehicles more cost competitive with conventionally powered cars, trucks and SUVs.

“Our environment and our economy demands more alternative fuel vehicles on the roads,” Muratsuchi said in introducing the bill.

The bill is supported by a broad array of environmentalists and by advocates who have long been concerned about the burden of California’s high gasoline and diesel prices on the state’s economy and on consumers.


Charles Langley, public advocate for the Utility Consumers’ Action Network in San Diego, called the bill “a splendid step in the right direction.”

But others point out that the bill might have only a limited effect because consumers are factoring in issues beyond the price of alternative fuel cars.

“There are other issues like limited range, figuring out where you can refuel, and how all of that factors into commutes,” said Bruce Bullock, executive director of the Maguire Energy Institute at Southern Methodist University.

Bullock added “and gasoline and diesel powered vehicles are continuing to become more and more efficient in terms of miles per gallon. Alternative fuel vehicles will face more and more of that kind of competition.”


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