New Mexico bill offers electric vehicle purchase tax credit

SANTA FE, N.M. (AP) - New Mexico would provide an income tax credit of up to $5,000 to offset the purchase of new plug-in electric vehicles as part of a proposal that cleared is first legislative hurdle on Monday.

A Senate panel on corporate affairs endorsed a bill Monday that would allow up to $10 million a year in state tax credits toward thousands of possible electric vehicle purchases and smaller tax breaks on home car-charging stations.

The full state tax credit would be available to middle- and low-income residents, while individuals earning more than $50,000 annually would be eligible for a smaller $2,500 credit on qualifying vehicles. A federal tax credit offers up to $7,500 on electric vehicle purchases.

At least 45 states offer incentives for people to buy and drive hybrid and electric vehicles, often through tax incentives or reduced registration fees.

At the same time, many states have increased registration fees on electric vehicles to offset the erosion of government income from taxes on gasoline sales. The New Mexico bill would hike registration fees on plug-in vehicles by up to $100 to bolster state and local roadway funding.

New Mexico’s tax credit toward car purchases would apply to fully electric vehicles as well as plug-in hybrid electric vehicles that run partially on gasoline or diesel - as long as the vehicle can travel at least 15 miles (24.1 kilometers) solely on battery power.

Energy, Minerals and Natural Resources Secretary Sarah Cottrell Propst said the credit should function as a rebate for low-income residents who owe little or no income tax and purchase a new car. A $300 tax credit toward installation of residential car-charging stations is proposed.

Bill co-sponsor Sen. Pat Woods of Broadview said credits are off limits for vehicles with a base retail price above $48,000 to avoid state tax expenditures on luxury vehicles.

Brian Dear of the Tesla Owners Club of New Mexico urged lawmakers to delay the increase in registration fees until electric vehicles catch on. Plug-in autos account for less than 1% of personal vehicles statewide.

He also said the $48,000 purchase price limit means many plug-in electric pickup trucks won’t qualify - when those vehicles offer dramatic reductions in greenhouse gas emissions compared to gasoline- and diesel-engine counterparts.