In the last decade, more and more people have realized the benefits of riding electric bikes for both business and pleasure. Saving money is also as a top reason to make the switch, and tax incentives can make purchasing an electric bike an even better deal.
Depending on your location and the type of bike you want to purchase, you may be eligible for a credit, deduction, or rebate on your electric bike purchase. If you’re not eligible, consider getting involved by writing an opinion editorial piece for your local paper, or by contacting your representatives.
On the national level, the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act (H.R. 1019) has been introduced but is currently stalled in the House of Representatives. The originally proposed 30% credit has also been cut down to 15% on the purchase of new electric bikes, but still features a tax credit for businesses to install charging stations. If you would like to support this act, encourage your representative to co-sponsor this bill with this easy web form from People for Bikes.
Things To Know About Tax Incentives
Each State Will Differ
Tax incentives for e-bikes are different for every state. Everyone's tax situation is also different, so it is important to consult with a professional like an accountant or financial planner before taking advantage of any incentive.
They save you LOTS of Money
Plus, tax incentives can help you save a ton of money on your electric bicycle purchase. This means you get more from your investment from day one so be sure to check with your local city hall before buying.
This will help you understand the tax incentives in your area. Plus, your city hall may also offer other incentives such as discounted parking and charging stations.
They’re Subject To Change
The value of the tax incentives is subject to change by lawmakers over time, so make sure you understand what your e-bike is worth before applying for a tax incentive.
Annual limits usually range from $20-$30 million dollars per state for most incentives meaning not every person who applies will be approved!
For this reason, it's important to apply as soon as possible after January first because there may already be several other people competing for those funds if you wait too long.
Tax Credit vs Tax Deduction: What Are The Differences?
A tax credit can reduce what you owe in taxes by a set amount or percentage while a deduction reduces how much of your income is taxable. For example, if someone makes $50k/year and has $2000 worth of credits will only pay taxes on $48k (less money owed) instead of paying full price on everything earned like with deductions).
It's all dependent on which method you opt for and which you are eligible for. You should also know that, if you're eligible for one, it can't be combined with the other (you must choose one or the other).
A great thing about tax credits is that even though they are subtracted from what you owe in taxes at year's end, any unclaimed amount goes back to your refund.
With deductions, however, anything not fully used up will carry over into future years but there may also be limitations on how much you can use each year - this all varies according to which type of deduction(s) and credit(s) that apply best to your situation.
E-Bike Incentives by State
Contra Costa County offers a rebate style incentive where you can apply for up to $150 towards the purchase of any ebike, or up to $300 for low-income households. Check out the program details here.
The City of Healdsburg offers rebates of up to $700 to promote biking as a clean mobility option. You can find out more about the rebate form and other electric mobility incentives here on their website.
In San Diego County the Pedal Ahead scheme offers a loan-to-own program where participants track and report their mileage for two years, and are offered safety and security accessories. After completing the two year term, the ebike and accessories are yours to own! Find out more here.
In Santa Clara County, energy companies are supporting ebike adoption, with Silicon Valley Power offering their customers a 10% rebate on the price of an ebike, up to $300. Find out more about their rebate here.
For Los Angeles, Orange, Riverside, and San Bernardino Counties, the South Coast Air Quality Management District offers a trade-in style program based on income. Residents may be eligible for a voucher up to $7500 that can be used on ebikes, cars, and bikes shares, as well as for public transport credit. Details on that program can be found here.
Customers of Holy Cross Energy (HCE) in Glenwood Springs, Eagle, Pitkin, Garfield, Mesa, and Gunnison Counties can receive a rebate up to $200 for a new electric bike, if it is used to offset vehicle miles. See here for program details.
For trips normally taken by car, residents of the Edwards Metro District can get a rebate up to $200 on a new electric bike that is used for commuting. See here for how you can apply.
The La Plata Electric Association, serving La Plata and Archuleta Counties, is offering a bill credit to their customers of up to 25% of the cost of a new ebike (not to exceed $125), when they purchase a new electric bike. More details can be found here.
Austin Energy offers rebates for both its residential and commercial customers, with up to $300 rebates for individuals and up to $400 for fleets of new ebikes. Program details found here.