For income tax years commencing on or after January 1, 2023, but prior to January 1, 2028, the bill allows a $750 income tax credit to any taxpayer that purchases a new motor vehicle (purchaser) and at the same time trades in an old motor vehicle for recycling. The purchase of the new motor vehicle and the trade in for recycling of the old motor vehicle are required to occur through the same licensed motor vehicle dealer. The bill defines a vehicle that is a 2015 model year or newer as a "new motor vehicle" and a vehicle that is a model year 2009 or older as an "old motor vehicle".
The purchaser is required to assign the tax credit to the purchaser's financing entity in a manner specified in the bill, and the financing entity is required to compensate the purchaser for the full nominal value of the tax credit. To complete the tax credit assignment, the purchaser and the financing entity are required to enter into an agreement that identifies the vehicle identification numbers of the old motor vehicle and the new motor vehicle, includes certification from the licensed motor vehicle dealer that the old motor vehicle will be traded for recycling pursuant to current law, and satisfies all other requirements regarding the assignment of the tax credit.
The financing entity is required to electronically submit a report containing the information required in the agreement to the department of revenue (department) in a form and manner to be determined by the department. In addition, the financing entity is required to file the agreement described with the original tax return for the taxable year in which the old motor vehicle is traded in for recycling and a new motor vehicle is purchased.
The licensed motor vehicle dealer that sells the purchaser the new motor vehicle and takes the old motor vehicle for recycling is required to certify, in a form and manner to be determined by the department, that an old motor vehicle that is traded in for recycling for the purpose of claiming the tax credit will be recycled in accordance with current law.
A licensed motor vehicle dealer that provides certification that it will recycle an old motor vehicle but that fails to transfer the vehicle for recycling is subject to a fine.
(Note: This summary applies to this bill as introduced.)