Does Electric Bike Qualify For A Tax Credit? Check out our updated 2022 guide to the electric bike rebates and tax credits currently offered in your area!
Governments are starting to implement measures that encourage the widespread use of e-bikes. This formal support often takes the form of financial incentives. If you own or are considering purchasing an e-bike, you may want to know if the vehicle qualifies for a tax credit.
Electric bikes do not currently qualify for tax credits. The E-BIKE Act (2021) proposed a nationwide 30% refundable tax credit but the bill was rejected. However, numerous states, counties, and cities offer tax e-bike rebates, while some states are considering instituting e-bike tax credits.
E-bikes are an efficient and environmentally-friendly means of transportation. However, these two-wheeled electric vehicles are relatively costly compared with non-motorized bicycles. Fortunately, there are increasing opportunities for savvy riders to offset the cost of purchasing an e-bike.
Does Electric Bike Qualify For A Tax Credit: What Is The E-Bike Act? Has It Passed?
The ‘Electric Bicycle Incentive Kickstart for the Environment Act (HR 1019)’ was a draft law (or bill) introduced to Congress in November 2021. Commonly called the E-Bike Act, this bill sought to promote the increased adoption of e-bikes in the US.
The E-Bike Act would have been the first federal legislation to provide tax incentives for electric bike purchases. Under the provisions of the E-Bike bill, taxpayers would receive refundable tax credits for purchasing e-bikes.
The E-Bike Act would have been the first federal law offering such tax incentives. However, this bill formed part of the Biden administration’s wider draft legislation called the Build Back Better Act, which was rejected in December 2021.
The rejection of the latter bill meant that the E-Bike Act was not passed into law either.
The Inflation Reduction Act (2022) retained similar tax incentives. However, these financial inducements were restricted to electric cars and did not include e-bikes.
At the state level, Washington, Connecticut, and Oklahoma legislatures are considering bills with provisions for e-bike tax credits.
Does Electric Bike Qualify For A Tax Credit: Which E-Bikes Would Qualify For The Tax Credit?
The E-Bike Act proposed to give tax credits for e-bikes that met a specific set of criteria. To qualify for the tax credit, e-bikes had to:
- have two wheels,
- have an electric motor with a capacity of less than 750w,
- have a retail price of less than $8000,
- be purchased and used by the taxpayer within the US.
Only Class 1, Class 2, and Class 3 electric bicycles were eligible for the tax credits proposed by the E-Bike Act.
Does Electric Bike Qualify For A Tax Credit: How Much Tax Credit Would I Get From The E-Bike Tax Credit?
The E-Bike Act proposed to grant a refundable tax credit for 30% of the total purchasing price of a qualifying electric bicycle.
For example, if an individual bought a $1000 e-bike, they would receive a tax credit of $30. This credit would be deducted from the annual tax the person owes or added to their tax refund.
The maximum value of the proposed tax credits was limited to $1500.
Taxpayers would have been eligible to receive these credits for one e-bike purchase per year.
Does Electric Bike Qualify For A Tax Credit: How To Support The E-Bike Tax Credit
While the E-Bike Act failed to pass through the Senate, e-bike advocacy groups continue to lobby for the adoption of financial incentives and support for electric bicycles in future bills.
You can support the development and adoption of legislation with provisions for e-bike credits by joining or donating to local or national e-bike advocacy groups like People for Bikes (www.peopleforbikes.org).
Alternatively, you can write to your local House Representative. Explain the environmental, economic, and social benefits that e-bikes offer, and make a clear and assertive case for the urgent implementation of tax credits and related incentives for electric bicycles.
Electric Bike Rebate Program
So, tax credits are not currently available for electric bicycles at the federal, state, and county levels. However, numerous states and counties have tax rebate programs for e-bikes or are considering proposals for similar incentive schemes.
Tax rebates are similar but not identical to credits, so it is crucial to comprehend the distinction between these tax-related incentives. Tax credits benefit a taxpayer’s balance (either deducted from the money they owe or added to their refund). In contrast, tax rebates get issued directly to the taxpayer even if they don’t owe any tax.
A significant consequence of this distinction is that rebates are more supportive of poor and low-income individuals who may not have a tax balance.
The states that offer tax rebates for e-bike purchases, or that have proposals to implement electric bicycle rebate programs are highlighted in the following table.
| State | E-Bike Tax Rebate Program |
| Vermont | Vermont is considering a state bill that proposes a $200 to $400 rebate for e-bike purchases. Eligibility for the incentive is contingent on an applicant’s financial circumstances. Some counties in Vermont already offer e-bike rebates, including Stowe, and Burlington. |
| Texas | The state of Texas does not provide e-bike rebates. Austin Energy consumers can receive a rebate if they purchase an e-bike. The value of the rebate is based on the retail price of the e-bike and has a limit of $300. |
| Connecticut | Connecticut provides $500 rebates for e-bike purchases under a state law called the Clean Air Act (2022). Rebates are applicable to electric bikes with a retail price not exceeding $3000. Eligibility for the rebate is income-dependent. |
| California | California has no statewide e-bike rebate program. However, the California Air Resources Board plans to implement an e-bike purchasing scheme with vouchers for a maximum of $750. Several Californian counties and cities also provide rebates to encourage the purchase of e-bikes. |
| Colorado | Colorado’s Air Quality Improvement Investments Act (2022) contains a provision for issuing electric bicycle rebates for middle and lower-income families. |
| Oregon | Oregon does not provide e-bike rebates, but electricity companies in certain counties offer these incentives. For example, EWEB customers in Eugene are eligible to receive a $300 rebate for the purchase of electric bicycles. |
| New York | The New York State Legislature is contemplating a bill to authorize a program called Ride Clean, which includes a 50% rebate (with a limit of $1100) for e-bike purchases. |
| Massachusetts | Massachusetts has a draft law (Bill H.3262) under consideration with provisions for an e-bike rebate of $500 to $750. Applicant income levels determine the rebate value they might be eligible to receive if the bill passes into law. |
| Hawaii | Hawaii has a statewide program that entitles resident e-bike purchasers to a 20% tax rebate (limited to $500). |
Conclusion
There are presently no tax credits for e-bikes, though some states, counties, and cities offer tax rebates. The E-Bike Act proposed a federal tax credit program for e-bike purchases, but the Senate did not adopt this draft legislation.
However, e-bikes might be eligible to receive a tax credit in near future in some parts of the country. Connecticut, Oklahoma, and Washington are reviewing draft legislation that will allow the issuing of tax credits for electric bicycle purchases.
