The Regal Nissan in Roswell, which sells Nissan Leafs, saw a dramatic drop in electric vehicle sales following the elimination of a state tax credit in 2015. ALAA ELASSAR / AJC

Georgia lawmakers try to bring back electric vehicle tax break

Eric Richner, a member of the EV Club of the South from Duluth, is an avid fan of electric vehicles. He owns two of them.

But when Richner considered buying another electric car, he had to think twice. Without a state tax credit, he wondered whether he could pay for it.

“I bought two cars because of the tax credit,” he said. “If there wasn’t a tax credit, this wouldn’t have been possible because it just wasn’t going to be affordable.”

In a state often recognized for its traffic, polluted skylines and dynamic drivers, Georgia once had the second-largest electric vehicle count in the nation.

But it was a short-lived dream come true for many such as Richner.

State Reps Allen PeakeTodd Jones and Spencer Frye are pushing for a $2,500 tax credit for electric vehicles in an attempt to reverse some of the damage they say was done after lawmakers killed the previous credit in 2015.

Georgia lawmakers at the time decided to cancel one of the most generous state tax incentives in the nation. At the time, the state provided a $5,000 tax credit for electric car purchases, and the industry boomed in Georgia.

But in the same transportation bill that raised fuel taxes to provide more funding for highway projects, lawmakers took a political slap at Georgians who owned or leased electric cars. They eliminated tax breaks for electric vehicle owners and tacked on an annual impact fee.

After the bill passed, e-car sales dropped. Records show 10,540 plug-in electric vehicles were sold in Georgia in 2014, the year before the tax credit was eliminated. Through September of last year, 1,829 had been sold in 2017.

State Rep. Chuck Martin, R-Alpharetta, was one of the leaders who helped end the initial state tax credit and opposes House Bill 98. While Martin said he supports electric vehicles and believes they are great for Georgia, he did not see the technological advances he wanted to come out of the original tax credit.

“I eliminated the credit some years ago because I thought it was too open-ended, too generous and too focused on a single technology,” Martin said. “I still feel that way. It’s just focused on an electric vehicle that we just think may win Georgia.”

Instead of supporting a bill that’s just for electric vehicles (EV) and alternative-fuel vehicles (AV), Martin believes looking at infrastructure is more important. If people really believe that electric vehicles are less expensive to operate, Martin says drivers already have a reason to buy them without the tax credit.

“It was just too nice,” he said. “It needed to go, and it did.”

Bo Scott, the president of Regal Nissan in Roswell, saw a substantial decrease in both the sales and leases of Nissan Leafs following the cancellation of the tax credit.

“In 2015, before the deadline of June 30, 2015, we averaged nearly 200 Leafs per month, 80 percent of which were 24-month leases,” Scott said. “The following month, we sold one. We eventually normalized to about 20 or so a month.”

Don Francis, the executive director of Clean Cities-Georgia, said air pollution from auto emissions is still a problem, especially in Atlanta. Francis said the tax credit not only made Georgia one of the top states for electric cars, it also helped the state take a positive step forward environmentally by decreasing the amounts of the six common air pollutants (ground-level ozone, particulate matter, carbon monoxide, lead, sulfur dioxide, and nitrogen dioxide), also known as criteria pollutants.

“Plug-in electric vehicles reduce greenhouse gases by 50 percent and criteria pollutants by 90 percent,” Francis said. “However, actions taken by the Georgia Legislature have significantly increased the time it will take for the impact (of electric vehicles) to be noticed.”

Jones, a Republican from Forsyth County, believes by canceling the state tax credit, Georgia missed an extremely profitable opportunity that could have continued to help the economy, encouraged people to drive environmentally friendly vehicles, and even contributed to education.

“We’re just failing. We fundamentally as a state are failing,” Jones said. “We didn’t take leadership in AV and EV. Georgia went from being a leader in the nation to being in a much, much worse situation.”

Along with the elimination of the tax credit, state lawmakers stamped an annual $200 registration fee on electric cars.

Drivers of electric vehicles are now taxed more per mile than any light-duty vehicle in Georgia, Francis said. The fee is twice the taxes a driver would pay driving a 25-miles-per-gallon vehicle for the same 10,000 miles.

Scott said that with the $200 registration, Georgia “went from being a state that had the best policies to being the absolute worst very quickly.”

“We can’t, on one hand, offer a tax credit to get people to buy electric vehicles, which I think are the future,” he said, “and then penalize them with that same hand.”

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