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Clean Fuels Program

Vehicle Tax Credit

 

Qualifying Electric Motorcycles

Taxpayers may claim a $750 nonrefundable tax credit for the original purchase or lease of a new qualifying motorcycle. A motorcycle qualifies for this credit if:

  • it has a seat or saddle for the use of the rider;
  • is designed to travel with not more than three wheels in contact with the ground;
  • may lawfully be operated on a freeway, as defined in Section 41-6a-102 UCA; and
  • is fueled only by electricity.

Documents to be Submitted with the TC40V for a Purchased Qualifying Motorcycle

To qualify for the tax credit, the taxpayer must provide the Division of Air Quality with the following documents:

1.  (a) a copy of the Manufacturer’s Statement of Origin (MSO) or equivalent
manufacturer's documentation showing that the motor vehicle is a qualifying electric motorcycle; or

(b)  a signed statement by an Automotive Service Excellence (ASE) certified technician
that includes the VIN, the technician's ASE certification number, and a verification that the motorcycle  meets the qualifications above;

2. an original or copy of the purchase order, customer invoice, or receipt that includes the
name of the taxpayer seeking the credit and the name of the seller, VIN, purchase date, and price of the motor vehicle;

3. a copy of the current Utah vehicle registration in the name of the taxpayer seeking the
credit; and

4. an original or copy of the odometer disclosure statement, as required in 41-1a-902
UCA (for the motor vehicle that was acquired as an original purchase.)

For Qualifying Motorcycles Leased After January 1, 2015

Utah Code 59-7-605 and 59-10-1009 allow for a credit for a leased motorcycle on a prorated basis, which is calculated in the following manner:

  • Determine the difference between the value of the motorcycle at the beginning of the lease, as stated in the lease agreement, and the value of the vehicle at the end of the lease, as stated in the lease agreement; and
  • Divide the difference by the value of the motorcycle at the beginning of the lease, as stated in the lease agreement to get the lease credit percentage.
  • Multiply the lease credit percentage by the full credit to determine the credit available to the lessee.  

Example One

A taxpayer leases an electric motorcycle with a value of $17,000 at the beginning of the lease and the lease agreement indicates that the value at the end of the leased will be $12,000. 

  • Enter vehicle value at the beginning of lease (VBL)= $17,000
  • Enter vehicle value at end of lease (VEL) = $12,000
  • Subtract 2 (VEL) from 1 (VBL) = $5,000 to get the difference. 
  • Divide the difference (3) by the VBL (1) to get the lease credit percentage = $5,000 / $17,000= 29% 
  • Take the percentage from 4 and multiply by the full credit.  In this case, the full credit is $750 and the final credit would be $218 for this motorcycle (29% x $750 = $217.50). 

Example Two

A taxpayer leases an electric motorcycle with a value of $22,000 at the beginning of the lease and the lease agreement indicates that the value at the end of the leased will be $16,000.   

  • Enter vehicle value at the beginning of lease (VBL) = $22,000
  • Enter vehicle value at end of lease (VEL) = $16,000
  • Subtract 2 (VEL) from 1 (VBL) = $8,000 to get the difference. 
  • Divide the difference ( 3) by the VBL (1) to get the lease credit percentage = $8,000 / $22,000 = 36%
  • Take the percentage and times by the full credit.  In this case, the full credit is $750 and the final credit would be $270 for this vehicles (36% x $750 = $270).

Documents to be submitted with the TC40V for a Leased Qualifying Motorcycle

To qualify for the tax credit, the taxpayer must provide the Division of Air Quality with the following documents:

1.   (a) a copy of the Manufacturer’s Statement of Origin (MSO) or equivalent
manufacturer's documentation showing that the motor vehicle is a qualifying electric motorcycle, or

(b)  a signed statement by an Automotive Service Excellence
(ASE)-certified technician that includes the VIN, the technician's ASE certification number, and states that the motorcycle is a qualifying electric motorcycle;

2. an original or copy of the lease agreement that includes the name of the taxpayer
seeking the credit, the name of the lessor of the vehicle, the VIN, the beginning date of the lease, the value of the vehicle at the beginning of the lease, and the value of the vehicle at the end of the lease;

3. a copy of the current Utah vehicle registration in the name of the taxpayer seeking the
credit; and

4. an original or copy of the odometer disclosure statement, as required in 41-1a-902 UCA (for the motor vehicle that was acquired as an original lease.)

 

Please contact Mat Carlile at (801) 536-4116.