In 2020 getting checks from the government for various amounts of money became a somewhat normal occurrence in a very abnormal time. Moving forward into 2021 it seems the trend of financial generosity from Uncle Sam may continue, although it will look a bit different. I am talking about a proposed tax break from the federal government. This tax break is called the Ebike Act. And as you may have guessed from the name it is a tax break to offset the cost of purchasing a new eBike.
The act offers a whopping 30% return on certain eBikes that cost up to $8,000. And it is worth noting that this is a credit and not a deduction. This means that you actually get a dollar for dollar reduction in the amount that you owe, where as a deduction simply reduces your taxable income. For example, if you bought an eBike for $5,500 in 2021 you would get a refund of $1,650 when you file your tax return for the purchase. This makes the price tag of an eBike look much more affordable. The proposed act has not been voted on yet but especially under the Biden administration its odds of making it to a law are looking good.
It may seem strange that the government would take an interest in a recreational activity such as biking. But this tax credit is a step forward, moving toward a greener, electric powered future for the US. Ebikes are often used for recreation but they are also a viable alternative means of transportation, to help offset the use of cars. And there are already tax credits up to $7,500 available for consumers who purchase electric cars. The eBike act ultimately aims to get more people riding e-bikes to commute. This will help to lessen emissions, decongest city traffic, all while helping the population stay more healthy.
As with most things in the political sphere there are differing opinions on this proposed eBike tax credit. Naysayers have a few reasons for doubting that this tax credit makes sense. For one, the bill is being sold as a way to help to reduce carbon emissions from standard vehicle transportation. However, many eBike riders are not using their bikes to commute but rather just for recreational purposes. Another point that has been brought up is that there are already supply issues when it comes to eBikes. Sales of eBikes are through the roof and only seem to be increasing, we always seem to be selling out here! So this new tax credit will incentivize even more sales and it seems that manufacturers may have a hard time keeping up with the demand.
Still the bill has many more proponents. Organizations including People for Bikes, California Bicycle Coalition, Bike Santa Cruz county, Ecology Action, National Resources Defense Council, Zell bikes, and Current eBikes, to name a few have all made statements in support of the Tax Credit. And many argue that by making the bike more affordable for everyone we will have more people using eBikes as an alternative form of transportation. And eBikes can do even more good that electric cars when it comes to reducing environmental strain due to commuting. But what do you think? Do you see this bill as a positive? Would a 30% tax credit push you to pull the trigger on a new eBike?
Have questions or comments? Reach out to us at email@example.com or on one of our social media channels.