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Tomblin proposes ending tax credit on plug-in cars

Published on NewsOK Modified: February 18, 2013 at 3:48 pm •  Published: February 18, 2013

Deputy Revenue Secretary Mark Muchow estimates that the proposed legislation will save the state $10 million in the next fiscal year. Muchow said that in addition to the cost savings, they are proposing the legislation to get back to the original focus of the bill, which was promoting natural gas.

"Natural gas is something that is produced in West Virginia, that would benefit various folks in West Virginia if it were to be consumed in our state," Muchow said.

And while the coal that makes the electricity that powers plug-in cars is also produced in-state, Muchow said there are federal tax credits for electric cars, so they feel more comfortable eliminating the state credit.

The tax credit has been used to offset the higher price of plug-in cars, which tend to be more expensive than comparable models, but require little to no gas and emit almost no pollutants.

The extent to which plug-in electric cars are more environmentally friendly than traditional cars varies depending on the electricity sources where the car is charged. In West Virginia, which gets most of its electricity from coal, natural gas or wind, a plug-in electric has a carbon footprint equivalent to a traditional car that gets 42 miles per gallon, according to a 2012 study by the Union of Concerned Scientists.

Also on the chopping block are tax credits for home refueling or charging stations for alternatively-fueled vehicles. Tax credits will remain in effect for the construction of natural gas and liquefied petroleum refueling stations, but the amounts would change. Those tax credits would be worth 20 percent of the construction costs of each station, with a maximum of $400,000 per station. Currently those credits are worth 50 percent of costs, with a maximum of $200,000 per station.

In explaining the rationale for keeping the credits for natural gas infrastructure, Muchow said the state had a chicken and egg problem. "On the infrastructure side, folks are waiting for folks to own vehicles before they put in infrastructure," Muchow said. "And on the vehicle side folks are waiting for the infrastructure prior to when they purchase the vehicles."