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Bill aims to accelerate purchase of clean cars through new sales tax incentive

(Sacramento, CA) - Assemblymember Phil Ting (D - San Francisco) re-introduced legislation aimed at boosting electric vehicle sales to meet California’s climate and air quality goals through reducing state sales taxes associated with the purchase of zero-emission and other clean vehicles.

“This bill enables Californians to save money while doing something good for the environment,” said Ting.  “We cannot confront climate change without changing the cars we drive.  Governor Brown has set a high bar for change and it needs a powerful jump start to be achieved.  There are more clean cars are on the market today than ever before and consumers need an incentive to buy them.”

Ting’s Assembly Bill (AB) 945 exempts the purchase of cars powered by electricity, compressed natural gas and hydrogen fuel cells or plug-in hybrid cars from the state’s share of sales tax.  Instead of facing the 7.5 percent state sales tax rate, new purchases would face a sales tax of 3.06 percent.  Trade-ins are eligible for the greater of two incentives: the 3.06 percent sales tax rate facing new car purchases or 7.5 percent on the new car price after trade-in value is deducted.  The larger the trade in value relative to purchase price, the better the latter option becomes.

California has nearly 33 million registered vehicles on its roads.  In 2012, Governor Brown issued an executive order with the goal of putting 1.5 million hybrid or electric vehicles on our roads by 2025.  However we are only at 12 percent of reaching this goal.  Last month, Governor Jerry Brown proposed an ambitious 15-year plan to reduce petroleum use in cars and trucks by half and put millions of electric vehicles on California roads.  He challenged the State Legislature to be innovative to protect the environment, stimulate economic growth and improve the quality of life.

“After buying a home, the purchase of a car is the most expensive purchase for most people,” added Ting.  “We must make electric vehicles more affordable for more people.”

In California, the transportation sector constitutes the greatest of source of pollution, accounting for 40% percent of the state’s greenhouse gas emissions.  According to the US EPA, electric vehicles emit only one quarter of pollutants of an average new car.

“The bulk of the nation’s clean car sales occur in California,” concluded Ting.  “However, we must do more to move the needle in favor of our environment.”

If enacted, the bill would take effect in January 2016 and expire in January 2020.

Contact: Anthony Matthews, tel. (916) 319-2019

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