Former XFL football player Rod Smart gained brief pop-cultural fame a few years back by putting the name "He Hate Me" on the back of his jersey. It's a sentiment Tesla Motors chief Elon Musk might be feeling about Texas and the long arm of its pro-dealership law after the Lone Star State laid out provisions for its planned rebates for buyers of electric and natural-gas vehicles.

As we all know, Tesla doesn't play that game.

Last week, Texas legislators approved the rebates, which can total up to $2,500 from the state and $10,000 when included with federal-government incentives, but managed to exclude the Tesla Model S from the list of electric cars eligible for a rebate, according to Fuel Fix. The issue is that only cars sold through Texas dealerships apply. As we all know, Tesla doesn't play that game.

Texas will disclose more details about the rebate program next spring, though for now, it's set aside about $3.8 million in funds, which would support about 1,550 plug-in and natural-gas vehicle purchases a year. The program doesn't yet have a start date but it will run through August of 2015.

That dealership issue continues to be a sticking point for Tesla, which doesn't have any dealerships since it sells vehicles directly to the buyer. Texas has what's regarded as the strictest laws when it comes to prohibiting automakers from owning their own shops and selling directly to the public. Last month, Green Car Reports outlined how many hoops Texas residents have to jump through in order to purchase or even service a Tesla Model S. It's a lot.

Still, Texas does support EVs, in its own way. The Long Star state has long had the second-highest number of publicly available charging stations in the country (after California). As of earlier this month, Texas was home to 508 such stations, compared to 1,480 in California, according to the US Department of Energy.


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  • 49 Comments
      Dave D
      • 1 Day Ago
      So what we have here is Texas saying it's ok to subsidize things like their auto dealer profits??? I thought the whole problem was that they didn't believe in subsidies and that they were all evil commie plots? So they like their dealer lobbyists more than they hate EVs??? LMAO!!!!! Are Texans ready to admit they're socialist now? Just in the style of the old Soviet Communists where they TALK a big game, but just give out favors to the people in power? Do the members of the Texas Automobile Dealers Association get Dacha's on town lake too? Wow, you guys are SUCH hypocrites.
        • 1 Day Ago
        @Dave D
        97% of the democrat politicians voted "yes" for this tesla-blocking bill only 51% republican´╗┐ (Make sure you place blame properly.)
      mylexicon
      • 1 Day Ago
      @ Nick If you know the specific order of Form 1040, then you know that the IRS can phase out credits with AMT regardless of where they are listed on Form 1040. The Plug-In Credit actually has an AMT phase out.........but only for passive activity. Technically, it's TMT, but you get the point. We are supposed to be looking at Plug-In Credits and point-of-sale rebates from the government point-of-view. I never said the wealthy don't qualify for the Plug-In Credit. I said they receive no benefit (economic benefit as a demographic) because tax policy puts in place a system of phase outs (for deductions and credits) and AMT. I'm not visualizing the forms or imagining a hypothetical tax payer. I'm visualizing the charts of AGI graphed against effective tax rates and total tax. The impact of Plug-In credits can be seen in the upper-middle class, around 100K AGI, where tax revenues are high enough and the AMT tax system is lenient enough to allow aggressive tax avoidance. Basically all elective credits manifest themselves in this area of the data. I'm not sure those people are Tesla buyers. In the future, ATRA should widen the gap between the effective tax burden and the AMT for the upper-middle class demographic. Texas doesn't not have an income tax system to claw back exemptions, deductions, or credits. Also, if you're into Form 1040, a rebate effectively moves the credit from "taxes & credits" to "payments". Payments are beneficial for taxpayers whose liability would be less than the credit. So rebates are inherently advantageous for lower-middle and middle-class car buyers compared to income tax credits. If policy-makers are interested in providing subsidies to lower-middle and middle-class buyers, there are compelling economic reasons to leave Tesla off of the rebate list. I understand that the dealer-retail debate is fresh on everyone's mind, but when it comes to point of sale rebates, I'd be more inclined to allege corruption if Tesla were included.
      Jim1961
      • 1 Day Ago
      NADA and Republican efforts to kill competition from Tesla just gives Tesla more free publicity. Keep it up, NADA and GOP, I love it when Tesla gets free publicity!!
        bluepongo1
        • 1 Day Ago
        @Jim1961
        Tesla Motors articles get many times more comments than most vehicles usually get , positive or negative it's all good publicity and click-bait for the benchmark Tesla vehicles!!! :-)
        • 1 Day Ago
        @Jim1961
        97% of the democrat politicians voted "yes" for the bill only 51% republican´╗┐ (Make sure you place blame properly.) .
      Aaron
      • 1 Day Ago
      "Last month, Green Car Reports outlined how many hoops Texas residents have to jump through in order to purchase or even service a Tesla Model S. It's a lot." No, it's not. There is a service center only a few miles from me in Dallas. It's easy. Purchasing a Model S is easy, too. Go online, enter teslamotors.com, and order away. GCR is a waste of bandwidth.
      Rotation
      • 1 Day Ago
      It makes sense you don't get credit for an EV you don't buy in-state. The fact that Tesla can't sell in-state is the real sticking point.
      Joeviocoe
      • 1 Year Ago
      Perversion of free market capitalism... Texas-style
      RoyEMunson
      • 1 Day Ago
      A CLEAR EXAMPLE of how lobbyists and special interest groups get the last say how your tax dollars are spent. Be more obvious why dont you?
      Nick Kordich
      • 1 Day Ago
      @mylexicon: "If you know the specific order of Form 1040, then you know that the IRS can phase out credits with AMT regardless of where they are listed on Form 1040. The Plug-In Credit actually has an AMT phase out.........but only for passive activity. Technically, it's TMT, but you get the point." Well, we're certainly whittling away at your concern. We're down from "Tesla buyers don't get the federal tax credits" to "Upper income taxpayers are subject to deduction/credit phase out and Alternative Minimum Tax" to just those subject to TMT (tentative minimum tax, for those who are following along at home). That was called out for explicit correction in 2009: "Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed Against AMT (Section 1144): Starting in 2009, the new law allows the Alternative Motor Vehicle Credit, including the tax credit for purchasing hybrid vehicles, to be applied against the Alternative Minimum Tax. Prior to the new law, the Alternative Motor Vehicle Credit could not be used to offset the AMT. This means the credit could not be taken if a taxpayer owed AMT or was reduced for some taxpayers who did not owe AMT." http://www.irs.gov/uac/Energy-Provisions-of-the-American-Recovery-and-Reinvestment-Act-of-2009 Here's the text of the American Taxpayer Relief Act of 2012, which you seem to think changes this: https://www.govtrack.us/congress/bills/112/hr8/text You are welcome to cite any changes in ATRA that would reduce the effectiveness to the credit due to changes in AMT/TMT calculations. The only change I found was the amendment to section 30(c)(2) that instead of sunsetting the applicability against AMT, ATRA makes it permanent (which's referenced in the "TaxBook" link in my previous post): "For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year." Please, cite some source for your belief in a change that would eliminate the credit, because right now it looks like you're just trying to scare people.
      Grendal
      • 1 Day Ago
      SpaceX should drop their business plans for Texas. Since Texas likes a fair business playing field...
      mylexicon
      • 1 Day Ago
      I can't answer your question specifically, if you don't identify the mistake. AMT and deductions/credit phase out affect the actual benefit of the plug-in credit for wealthy Tesla buyers. Texas has no income tax return so they do not have any phase out mechanism to avoid providing charity to the wealthy. I doubt they would have given a rebate on a vehicle that costs considerably more than median household income.
      mylexicon
      • 1 Day Ago
      Maybe I work in the tax industry, and I'm quite certain you do not know the AMT income thresholds, nor do you know how ATRA has changed AMT.
      Actionable Mango
      • 1 Day Ago
      I don't think taxpayers should have to subsidize $100,000 toys for the wealthy.
        JP
        • 1 Day Ago
        @Actionable Mango
        Since the wealthy pay the most taxes it's really the wealthy subsidizing the wealthy. Also not everyone buying a Model S is wealthy, or spending $100K.
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