Low-speed, neighborhood electric vehicles are an interesting case. No one thinks of them as "real cars" – although the Wheego Whip, above, tries to be the Cadillac of NEVs – but they certainly serve a purpose and can meet the transportation needs of some people, some of the time. But, should they be free?
Keith Andrews, president of Fairplay Cars, sent in some background information about a controversy brewing in Oklahoma that, at least for now, makes some NEVs effectively free. The state offers a huge tax credit towards purchasing an NEV, but the Oklahoma Tax Commission is campaigning to "black list a significant number of street legal electric cars from the states healthy tax credits now in place," Andrews wrote. The trouble revolves around the difference between a LSV and a golf cart. According to Andrews, the low-speed vehicle makers in favor of the plan pointed out in court that Oklahoma has already defined what is and is not a low-speed vehicle – based on NHTSA rules – and therefore "should adhere to its own standard and confirm approval of all LSV's that qualify on the Federal level." The Oklahoma Tax Commission has promised to appeal to the state Supreme Court, saying the decision could cost the state over $40 million. Read more from Andrews after the jump.
[Source: News 9, WSJ, Keith Andrews]
The emergency order by the Oklahoma State Tax Commission in mid-September was said to add clarity to the definition of what a low speed vehicle is. The reference to "golf car like" is at best a subjective opinion and not a legal description. This issue was not raised during the past few years of similar cars being sold and tax credits issued. The motivation for the OSTC may have been the results of a perfect storm. When the state tax credit is combined with the Federal tax incentive - the cars are free. This has driven demand through the roof and means a lot of lost tax revenue for the state of Oklahoma.
In a few days our company, along with other manufacturers from around the country and distributors from Oklahoma will be in a court room in Enid, Oklahoma.
We will raise the following points:
- The low speed vehicle (LSV) has been defined by the National Highway Traffic Safety Administration 49CFR 571.500
- The state of Oklahoma agreed to use this as the criteria to define this (see current web site below)
- Manufacturers of the low speed vehicles must comply to those standards and based on this already qualify
- Some of the vehicles on the "approved list" published by the Oklahoma State Tax Commission are "golf car like" therefore not consistent with the ruling imposed on the other manufacturers who have been denied.
- In order to offer some rational objectivity to the situation, the state of Oklahoma should adhere to its own standard and confirm approval of all LSV's that qualify on the Federal level.
The confusion and delays caused by the emergency orders have hurt the EVE LSV manufactured by Fairplay Electric Cars and resulted in lost sales opportunities to those "approved" LSV's. The sunset on the Federal tax incentive is the end of 2009. We have only a limited window of time to win back our potential customers and supply our loyal dealers the products they need to fill demand (statement send in mid-October).