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An Act Relating To Taxation; Creating The Electric Vehicle Income Tax Credit; Creating The Electric Vehicle Charging Unit Income Tax Credit And The Electric Vehicle Charging Unit Corporate Income Tax Credit; Requiring An Additional Registration Fee For An Electric Vehicle; Providing For The Additional Registration Fee To Be Distributed To The State Road Fund.

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HB 040 on
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This bill (identical to SB 9) would create electric vehicle and electric vehicle charging unit income tax credits. It would also require an additional registration fee for electric vehicles. Prior to January 1, 2021, a taxpayer who is not a dependent of another individual and who purchases or leases a qualified electric vehicle would be eligible for an individual income tax credit of $2,500.


The purpose of this “electric vehicle income tax credit” is to encourage consumers to purchase or lease qualified electric vehicles that may help to decrease the presence of greenhouse gas, carbon monoxide and ozone precursor emissions in the environment.


A qualified electric vehicle is a motor vehicle or plug-in hybrid electric vehicle with four wheels

that, among other requirements, is rated at not less than 2,200 pounds and not more than 8,500 pounds unloaded base weight; has a maximum speed of at least 65 miles per hour; and is propelled to a significant extent by an electric motor that draws electricity from a battery that has a capacity of not less than four kilowatt-hours and is capable of being recharged from an external source of electricity.


A taxpayer may claim the electric vehicle income tax credit for any taxable year in which the taxpayer purchases a qualified electric vehicle or begins a new lease with a term of at least two years for a qualified electric vehicle. An individual taxpayer may not claim more than one electric vehicle income tax credit.

The aggregate amount of electric vehicle income tax credit claims that may be authorized for payment in any fiscal year is $2,000,000.


Prior to January 1, 2021, an individual or corporate taxpayer who purchases and installs an electric vehicle charging unit that has passed inspection by a state-authorized construction-permitting governmental entity may apply for, and the department may allow, a credit against the taxpayer’s income tax liability. The purpose of this “electric vehicle charging unit income tax credit” is to encourage businesses to purchase and install electric vehicle charging units to provide the infrastructure necessary to support the acceptance of electric vehicles.


An “electric vehicle charging unit” is a wall-mounted or pedestal-style device that is used to provide electricity to an electric vehicle; is designed to create a connection between an electric grid and the electric vehicle; communicates with the electric vehicle’s control system to ensure that electricity flows at an appropriate voltage and current level; and is installed on nonresidential property in New Mexico.


The individual or corporate electric vehicle charging unit income tax credit shall not exceed $3,000 or 30 percent of the cost to purchase and install an electric vehicle charging unit, whichever is less; or, if the electric vehicle charging unit is powered primarily by solar power, $5,000 or thirty percent of the cost to purchase and install the unit, whichever is less. The department may allow a maximum annual aggregate of $1,000,000 in electric charging unit individual income tax credits and $1,000,000 in electric charging unit corporate income tax credits per fiscal year.


Beginning in 2019 and every five years thereafter that the electric vehicle and electric vehicle charging unit income tax credits are in effect, TRD shall compile and present annual reports to the Revenue Stabilization and Tax Policy Committee and the LFC, with an analysis of the effectiveness and cost of the tax credits and of whether the tax credits are performing the purpose for which they were created.


The bill would also impose an additional annual registration fee of $30.00 for registration of each electric vehicle. All such fees would be distributed to the State Road Fund.


On February 17th the Transportation and Public Works Committee amended HB 40 to:

  • extend the tax credits by two years, to 2023;
  • provide that a qualifying electric vehicle must be purchased by a resident from a New Mexico dealer;
  • increase the additional annual registration fee for an electric vehicle from $30.00 to $50.00; and
  • delay the effective date of the bill to January 1, 2017.


A potential benefit of this bill might be an increase in the number of electric and hybrid automobiles in New Mexico and a decrease in conventional gasoline and diesel powered vehicles and the corresponding emissions.