Friday, July 18, 2014

Breaking: The i3 Rex is Indeed Tax Exempt in New Jersey After All!

My i3 REx in front of my house with my 8.775 kW solar array in view 
In a surprising turn of events, the New Jersey Department of Environmental Protection (NJDEP) reversed a previous decision to exclude the i3 REx from the States Tax exemption for zero emission vehicles. This hopefully ends the nearly six month saga from the time it was originally thought the range extended version would indeed qualify, to the announcement shortly after the launch that it would not.

I actually found out a few days after I bought my car that it would not qualify, and I would have to pay $3,921.00 in sales tax. This was totally unexpected and would have actually made the range extender nearly an $8,000 option for me! As much as I love having it, I wouldn't have agreed to pay that much for it had I known the effective cost would be so high. For $3,875 I think it's fairly priced. But $7,800? No way! I even dedicated a blog post to this issue back in May when the surprising (bad) news was announced. I will say that I never actually ended up paying it all though. That's because my dealership, JMK BMW realized this was a BMW communication error and not the customers' fault. They decided they couldn't go back and charge customers so much more than they had signed contracts for and they honorably worked out a deal which made everybody happy and nobody cancelled their order. My client adviser, Manny Antunes, sold eleven i3s with range extenders so this wasn't an easy decision but the dealership decided it was better to keep the customers happy than to call them all up and tell them they now owed nearly $4,000 more for sales tax. 

However that wasn't the case with other dealerships, and I know people who bought REx cars and had indeed paid the every penny of the sales tax and didn't get any other dealership rebate or credit. They will be very happy when they open the mailbox one day soon and find a nice check in there because this decision is retroactive to May 1st, which is before any i3s were sold in the US. I was actually the first i3 REx delivery in the US, and that took place on May 21st so all i3 REx cars sold in NJ will indeed qualify for the ZEV tax exemption. 

The NJDEP Zero Emission Tax Exemption list has already been updated to include the i3 REx and can be viewed here. Let's just hope this ends the, "It's tax exempt…no it's not," saga we've had here in the Garden State.


9 comments:

  1. Tom, great news ! This will bring more REXes to NJ for the people that could not live with 80 miles but also would not pay $8000 for 70 extra miles...
    Manny & BMW should throw a party !

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  2. Glad this worked out. I was amazed that dealers would consider compensating customers who had the tax to pay but they don't have to now so everyone's happy.

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    1. The dealers were in a tough spot. They had told the customers the car was tax exempt because that it what they were told by BMW NA. So they had signed contracts and some customers had even taken delivery already when it was announced that it didn't qualify. It was a nightmare for the dealers to call their customers and say "Come back and write us a $3,XXX check". Some dealers made special deals via rebates to offset the tax burden so customers wouldn't say "Well then take back the car, I don't want it now". It's not necessarily the fact that people don't want to pay sales tax, it's just that for 6 months they have been told it was tax exempt, and now that the cars are ready for delivery they get hit with the bad news. Luckily it worked out. Kudos to BMW NA for getting the NJDEP to reverse their decision. No doubt this took a lot of convincing.

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  3. Yay, a car with a gasoline engine is eligible for a zero emissions tax exemption! (Sarcasm)

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    1. I believe the primary goal is to incentivize the purchase of zero emission vehicles. The vast majority of i3 REx miles will be driven on pure electric. It's not perfect, but as more and more different types of PHEVs are introduced, the regulations will need to adapt. The i3 REx is different than any other PHEV on the market and will help to get many people in a plug in vehicle that previously wouldn't.

      It's also a slippery slope to distinguish which EV is "cleaner" than another, because the individual case use will actually determine how clean it really is. I power my i3 REx with mostly electric from my solar array. Take a Nissan LEAF or Model S and charge it exclusively from grid energy and in most cases my i3 REx, even with burning a couple 5 to 10 gallons of gas per year is essentially a cleaner car than the pure EVs that don't have direct access to renewable energy like I do.

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  4. I hope this is the final word. It is really fair that REX is qualified because the E range is decent and the gas engine is really supplement, not full alternative drive. Paying tax for the whole car because of $3.9k option would be just unfair. But I admit that this option makes the car quite different. Anyway, this whole thing is shifting my purchasing preference in REX's favor, again.

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  5. Thanks again for keeping us on top of the latest i3 news Tom. There is really no reason to go anywhere else!

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  6. I'm glad to hear that New Jersey is accepting the REx.

    I don't like the attitude that only pure electric cars are worth consideration. Though I can understand the suspicion that owners of plug-in hybrids with low AER might not bother to plug in their car and use use pure gas. So I don't mind the somewhat artificial inconvenience of the small gas tank on the i3 REx. It seems right that gas should be more of a bother to use.

    Here in Maryland the law is written to cover plug-in electric vehicles taht are "propelled to a significant extent by an electric motor that draws electricity from a battery". It is based on the battery size with 25 kWh getting the full credit. A plug-in hybrid with a small battery won't get a big credit but it will get something. I think a sliding scale is much fairer than an all or nothing approach.

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  7. Thanks Tom for the info. I was on the fence to go for a BEV or just wait another 3 years for the Model III. This is great news as otherwise $8K would not make sense worth the extra range.

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