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Governor Whitmer pitches plan to ditch sales tax on EV vehicles

A charging cord plugs into the electric Ford F-150 Lightning
Dustin Dwyer
Michigan Radio
A Ford F-150 Lightning electric truck at LaFontaine Ford Grand Rapids.

Governor Gretchen Whitmer says a two-year pause on collecting sales taxes on electric vehicles will help more people afford them.

The governor promoted the plan during a stop at a car dealership in Grand Rapids on Wednesday.

“Savings would be offered at the point of sale,” Whitmer said, standing on the lot at LaFontaine Ford Grand Rapids. ”So you’d walk out of the dealership, like this one, with more money in your pocket. The rebate aims to make it easier for more folks to get their first electric vehicle by lowering the costs upfront.”

The governor’s office said the sales tax exemption could save buyers up to $2,400 on certain vehicles. The state sales tax is set at 6%, so savings would depend on the vehicle’s cost.

The governor proposed keeping the exemption in place for two years. Her office estimates it will cost the state $48.4 million dollars in lost tax revenue in its first year.

The federal government already offers a tax break of up to $7,500 on new electric vehicle purchases, an incentive that was approved last year in the federal Inflation Reduction Act.

U.S. Congresswoman Hillary Scholten, who represents Grand Rapids, joined Whitmer at the event on Wednesday to promote EV programs.

“It is so exciting to think about all of the opportunities that we have right in front of us,” Scholten said. “With the combination of the governor’s tax credit, and our federal tax credit, Michigan is poised to be one of the most affordable places in the country to purchase and own an electric vehicle.”

And Ryan LaFontaine, who operates the LaFontaine Automotive Group with 33 dealerships in Michigan, said the supply chain disruptions that led to long wait times for new vehicles are starting to dissipate.

“Supply has increased dramatically,” LaFontaine said. “It’s becoming more and more readily available, especially in the EV side.”

“They’re moving quickly,” Whitmer added.

State legislators are expected to take up the budget recommendations and approve a final budget later this year.

Dustin Dwyer reports enterprise and long-form stories from Michigan Public’s West Michigan bureau. He was a fellow in the class of 2018 at the Nieman Foundation for Journalism at Harvard. He’s been with Michigan Public since 2004, when he started as an intern in the newsroom.
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