Maryland EV Tax Credit Status as of June, 2020

Funding Depleted – But File an Application Anyway

New:
2021 Maryland Legislation Includes EV Tax Credit Bill
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Don’t count on the $3,000 Maryland EV tax credit if you buy an electric car right now. Funding for the program is exhausted and no further funding is currently authorized. However, you should still submit the form to reserve your place in line in case funding is approved in the future.

Go to the MVA website for the current status of the Maryland EV Tax Credit program and do your due diligence before making a purchase.

The Clean Cars Act of 2017, signed into law by Governor Larry Hogan, authorized an excise tax credit on plug-in electric cars for three years, from July 1, 2017 to June 30, 2020.

Funds for the Maryland excise tax credit usually run out early each fiscal year. Applicants are then put on a wait list until the next round of funding is released. Filling the backlog means that each year’s funding runs out sooner than the last.

In September, 2016 the money ran out barely two months into fiscal year 2017. The Maryland MVA sent out a bulletin advising auto dealers to alert customers that funds were depleted and the program had ended.

EV Drivers Fall Through the Gap

People who bought an electric vehicle between September, 2016 — when the old program’s funding ran out — and July 1, 2017 — when the new program began — completely lost out on the rebate.

A bill sponsored by Senator Roger Manno in 2018 (SB177) proposed to reimburse the people who fell into the gap in funding. The policy note advised that a total of 493 applications that would have qualified for a tax credit did not receive one because the application was submitted after the funding was depleted.

Two EV drivers testified before the Budget and Taxation Committee. One noted that the rebates were widely promoted by the dealers and by the state. When he applied for the rebate he was shocked to learn that the program had already run out of funding. The other citizen said that he had counted on getting the rebate to fit the purchase into his household budget. [watch the testimony] The bill passed the Senate (46-0) but failed in the House.

A similar bill was introduced in 2019 (HB72). It didn’t pass either. Presumably, there are still nearly 500 people who submitted an application but never got the incentive.

Maryland Excise Tax Credit Not Reauthorized for FY 2021

In January, the Clean Cars Act of 2020 was introduced to extend the program for another three years. It also proposed to increase the annual funding from $6,000,000 to $12,000,000. Unfortunately, the bill didn’t pass before the Maryland General Assembly adjourned early due to COVID-19.

The current program is set to end on June 30, 2020. The entire $6 million allocated for FY 2020 was claimed even before the fiscal year started. For more than a year, administrators of the program have been holding on to applications with the intention of paying EV drivers when and if more funding is authorized.

Will the Maryland legislature try again next session with a bill to fund an EV purchase incentive? Probably. Will it contain a provision to retroactively fund the applications being held? Maybe.

Perhaps the MD electric vehicle incentive is not working exactly as intended. There’s probably more that could be done to restore the credibility of these rebate programs in the future. Until then, EV buyer beware.