The qualified clean commercial vehicle tax credit is a new tax credit applicable to each vehicle purchased by a taxpayer after December 31, 2022, and before January 1, 2033. For a tax-exempt entity, a commercial vehicle includes a vehicle from a manufacturer qualified by the Environmental Protection Agency that the entity acquires for use or lease (and not for resale). This tax credit cannot be combined with other clean vehicle tax credits for the same vehicle; only one tax credit may be claimed per vehicle.
The tax credit amount is the lesser of either 15% of the vehicle cost (30% for non-gasoline or non-diesel vehicles) or the difference between the purchase price of the vehicle and a comparable gasoline or diesel vehicle. The maximum amount is $7,500 for a vehicle with a gross vehicle weight rating (GVWR) less than 14,000 pounds, or $40,000 for vehicles exceeding that GVWR.
Tax-exempt entities are able to claim this tax credit as a cash payment. For example, let’s say that a private nonprofit school purchases a qualifying electric vehicle with a GVWR of fewer than 14,000 pounds that costs $60,000, and a comparable gasoline or diesel vehicle costs $48,000. Since the difference between the electric vehicle and the comparable vehicle is $12,000, the private nonprofit school is eligible for a cash payment of $7,500, which is the lesser of the two potential tax credit amounts.