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INFO SHEET U.S. TAX CREDIT FOR COMMERCIAL CLEAN VEHICLES.
Special rules for eligible businesses operating electric BMWs and MINIs.
The Inflation Reduction Act (IRA) contains several sections that offer taxpayers credits for the purchase of clean vehiclesÂ
[i.e., Battery Electric Vehicles (BEVs) and Plug-In Hybrid Electric Vehicles (PHEVs)].
While §30D of the code has received a lot of public attention, it is mostly geared at consumers and has strict eligibilityÂ
requirements. Often overlooked is §45W of the code, which provides simplified access to tax credits for businesses thatÂ
operate a qualified commercial clean vehicle, as tax credit eligibility under §45W is currently not tied to the vehicle's MSRP,Â
assembly location, battery components, critical mineral sourcing or adjusted gross income.
To qualify under Section 45W, a clean vehicle must be subject to a depreciation allowance and be for use in your business,Â
not for resale. Taxpayers that lease clean vehicles to customers are eligible for the credit if they are the owner of the vehicleÂ
for federal income tax purposes. Thus, entities that provide TRAC leasing may not qualify for this credit*.
for federal income tax purposes. Thus, entities that provide TRAC leasing may not qualify for this credit*.
At this time, all new BMW Group EVs are eligible for the commercial clean vehicle credit of up to $7,500 under §45W:
        •  For 2023, the incremental cost of a compact PHEV (BMW 330e, BMW 530e) is $7,000.
Resources.
•  Fully Electric (Battery) EVs (BMW i4, BMW i5, BMW iX, BMW i7, MINI Cooper SE) qualify for the full $7,500Â
  credit in 2023;
•  Plug-In Hybrid EVs - the credit is computed as the lesser of (A) 15% of the basis of the vehicle, or (B) theÂ
  incremental cost of the vehicle, or (C) $7,500.
        •  For 2023, the incremental cost of a compact PHEV (BMW 330e, BMW 530e) is $7,000.
        •  For 2023, the incremental cost of non-compact PHEVs (BMW X5 xDr50e, BMW 750xe, BMW XM,
      MINI Cooper SE Countryman) is $7,500.
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There is no limit on the number of credits a business can claim. For businesses, the credits are nonrefundable, so you can't
get back more on the credit than you owe in taxes, but a Section 45W credit can be carried over as a general business credit.
Section 179 Special business deduction opportunity for SUVs with a GVWR in excess of 6,000 pounds:
Since the IRS categorizes SUVs with a GVWR in excess of 6,000 pounds differently than other luxury autos, businessÂ
owners that purchase a BMW X5 xDr50e, iX, or XM in 2023 may also be eligible for an immediate write-off of up to $28,900*.
Resources.
•  IRS website for commercial clean vehicle tax credits: https://www.irs.gov/credits-deductions/commercial-clean-vehicle-credit
•  IRS FAQ sheet on commercial clean vehicles credit (Section G): https://www.irs.gov/pub/taxpros/fs-2023-08.pdf
*Potential federal tax credits, incentives and business deductions are not within BMW Group's control, are subject to
change or expire without notice, and are referenced for informational purposes only. Eligibility for tax credits depends on
the purchaser's tax liability and other factors. Tax credits are potential future benefits and not applied at the time of
purchase. This information does not constitute tax, financial or legal advice. Please consult with your tax, financial or legal
professional to determine eligibility, amount of credits, incentives or eligible deductions, if any, and further details. For
additional information visit https://www.irs.gov/.
change or expire without notice, and are referenced for informational purposes only. Eligibility for tax credits depends on
the purchaser's tax liability and other factors. Tax credits are potential future benefits and not applied at the time of
purchase. This information does not constitute tax, financial or legal advice. Please consult with your tax, financial or legal
professional to determine eligibility, amount of credits, incentives or eligible deductions, if any, and further details. For
additional information visit https://www.irs.gov/.
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