Marty Lawson simply wanted to save the City of Oklahoma City — and its taxpayers — some money, while increasing the city fleet’s “green factor.” The Internal Revenue Service (IRS) offered a substantial $7,500 tax credit for each new plug-in electric vehicle purchase. And, in addition, a tax code provision could pave the way for public sector fleets to secure all or a portion of the credit amount.
Lawson, management specialist for Oklahoma City’s Fleet Services Division, was determined to take advantage of the tax provision for the fleet’s purchase of two Nissan Leaf sedans. The City’s fleet numbers nearly 4,000 vehicles, including 93 compressed natural gas (CNG)-powered and all-electric units.
Essentially, “the provision allows dealers to claim the tax credit on vehicle sales to tax-exempt organizations, but the credit amount must be disclosed in writing to the purchasing entity,” according to Lawson, who holds an MBA and is a Certified Automotive Fleet Manager (CAFM) candidate.
Lawson reasoned a dealership could apply a percentage of the credit amount to reducing the vehicle purchase price. A simple proposition, but not an easy process, he soon discovered.
An initial unsuccessful competitive bid revealed dealers often were misinformed, and didn’t understand the tax credit.
In addition, Lawson pointed out, “Dealers do have risks. There’s paperwork involved. And, they have to wait for the return until the next tax cycle, while passing on the credit in the sales price.”
Lawson turned to Yvonne Anderson, Central Oklahoma Clean Cities coordinator and special programs officer at the Association of Central Oklahoma Governments.
Anderson knew public sector fleets could realize some of the tax credit, but the process would take some work. She sought input from other Clean Cities coordinators and industry professionals, including Richard Battersby, CAFM, CPFP, coordinator of East Bay Clean Cities and fleet services director for the University of California, Davis, where about 48 percent of the campus on-road vehicle fleet are hybrid-electric or alternative-fuel-capable vehicles.