Senator Joe Manchin, D-W.V., last week introduced legislation (the “American Vehicle Security Act of 2023”) that would require Treasury to issue guidance on the critical mineral requirements of the Section 30D clean vehicle tax credit included in the Inflation Reduction Act (IRA) before taxpayers can claim the credit.
The Section 30D credit is worth up to $7,500 per vehicle purchase. To claim the credit, 50% of electric vehicle (EV) batteries in the vehicle must come from North America, and batteries also must contain at least 40% critical minerals from the U.S. or a country with which the U.S. has a free-trade agreement
In a statement accompanying the introduction of the bill, Manchin opined, “The Treasury Department failed to meet the statutory deadline of Dec. 31, 2022, to release guidance for the 30D credit and have created an opportunity to circumvent stringent supply chain requirements included in the IRA.”
Manchin further noted, “The IRA is first-and-foremost an energy security bill, and the EV tax credits were designed to grow domestic manufacturing and reduce our reliance on foreign supply chains for the critical minerals needed to produce EV batteries.”
Manchin’s bill comes after several European leaders recently voiced frustration with the green-subsidy package at the World Economic Forum meeting in Davos, Switzerland, two weeks ago.
The outlook for the bill is tenuous at best, as any legislation must be approved by a Republican-controlled House in addition to passing on bipartisan basis in the Senate. Taxpayers should remain apprised of developments on the clean vehicle credit both legislatively and administratively, as Treasury may soon issue regulations making Manchin’s bill obsolete.
More tax hot topics
No Results Found. Please search again using different keywords and/or filters.