# Plain Language Summary: Michael F. Donoughe Tax Credit for Off Road Electric Vehicles Act

This bill creates a new tax credit for people who buy brand-new electric off-road vehicles. If you purchase a qualifying off-road electric vehicle, you can claim a tax credit worth either 10 percent of what you paid for it or $2,500, whichever is smaller. So if you buy an off-road electric vehicle for $20,000, you'd get a $2,000 credit (10 percent), but if it costs $30,000, you'd still only get the maximum $2,500 credit. This credit reduces the amount of federal income tax you owe, effectively lowering your out-of-pocket cost for the vehicle.

The vehicles that qualify for this credit are specifically designed for off-road use—think ATVs, utility vehicles, and similar equipment used on farms, construction sites, or recreational areas. They must weigh less than 3,500 pounds, have at least three wheels and one seat, be capable of going at least 40 miles per hour, and have a battery with at least 6 kilowatt-hours of capacity. Importantly, these vehicles cannot be designed primarily for use on public roads or highways, and they can't be designed to operate on rails, in the air, or in water (with the exception of amphibious vehicles that work on both land and water).

The credit applies to vehicles purchased after December 31, 2023, and you can only claim it once per vehicle. If you're in a business that uses electric off-road equipment—like farming, construction, or outdoor recreation—this could help offset the higher upfront cost of switching to electric-powered machinery. The credit can also be transferred, meaning in some cases the seller of the vehicle could pass the benefit directly to the buyer instead of the buyer claiming it on their taxes.

Michael F. Donoughe Tax Credit for Off Road Electric Vehicles Act

Phillips, Dean

Michael F. Donoughe Tax Credit for Off Road Electric Vehicles Act This bill expands the clean vehicle tax credit to include new qualified off-road plug-in electric vehicles. The amount of the tax credit allowed for a new qualified off-road plug-in electric vehicle is 10% of the cost of the vehicle or $2,500,&nbsp;whichever is lower.The bill defines a new qualified off-road plug-in electric vehicle as any vehicle that<ul><li>is acquired new and for use by the taxpayer;</li><li>is made by a qualified manufacturer;</li><li>is powered by an electric motor that draws electricity from a battery with a capacity of at least six&nbsp; kilowatt hours;</li><li>has final assembly occurring in North America;</li><li>has a dry weight of less than 3,500 pounds;</li><li>has three or more wheels;</li><li>has one or more seats;</li><li>is manufactured primarily for off-road use;</li><li>is designed for use on rough terrain&nbsp;and, except in the case of a vehicle designed to operate on land and water, is not designed to operate on rails, in the air, or in or on the water; and</li><li>is capable of reaching a speed of 40 miles per hour.</li></ul>Under current law, a qualified manufacturer is any manufacturer that has a written agreement with the Internal Revenue Service and submits reports containing information about each eligible clean vehicle.Finally, the bill allows the tax credit for a new qualified off-road plug-in electric vehicle to be transferred from the taxpayer to an eligible entity (e.g., vehicle dealer) in exchange for a financial benefit (e.g., rebate).