MICHauto > Blog > MICHauto in the News > House Panel Debates Tax Exemption For EV Chargers

House Panel Debates Tax Exemption For EV Chargers

March 12, 2024

Gongwer News
Elena Durnbaugh
March 6, 2024

To properly support the transition to electric vehicles, Michigan needs to support improved access to EV chargers, supporters of HB 4708 told the House Tax Policy Committee Wednesday.

“We want to make sure if you’re a strip mall, if you’re a coffee shop, if you are a homeowner who wants to install these at your home, you’re not going to be hit on the backend with increased tax liability,” Rep. Alabas Farhat (D-Dearborn) told the committee. “This would make it easier.”

The bill, sponsored by Farhat, would amend the General Property Tax Act to exempt qualified charging stations from property taxes that are levied after December 31, 2023. The exemption would apply to commercial, residential and industrial taxpayers, though discussions are ongoing whether the exemption would be for personal or real property taxes.

Kurt Berryman, representing the Michigan Automobile Dealers Association, gave testimony on how the legislation would affect car dealerships.

“When the auto manufacturers made the shift, EVs became a mandate for us,” he said.

Most dealerships are spending $500,000 to install EV charging stations, Berryman said. If there were to be tax incentives, instead of installing the three charging stations mandated by the automaker, dealerships might install six, making them more accessible.

“Tax policy does change behavior,” he said. “If the state has a goal to encourage EVs, and certainly we’ve heard from the governor a number of times, to expand the number of charging stations, EVs aren’t going to run without them being charged, I think it’s a nice step for the state to come in and say if you put these in, you’re not going to be punished with either real or personal property tax increase on this.”

Farhat said that he and other stakeholders have been working with the Department of Treasury on the legislation, and that the department is generally in favor of the bill as long as the School Aid Fund is held harmless.

EV charging stations typically cost between $60,000 and $200,000, depending on the type of charger. The incentive would cost the state about $1 million, according to an estimate by the House Fiscal Agency.

Rep. Julie Brixie (D-Okemos) said that although she was in favor of EVs, she had concerns about how tax incentives would affect local governments, as real and personal property taxes affect their budget more.

“My concern is that Treasury might not be that broken up about it,” she said. “Personal property and real property are way more impactful to local government than state government.”

Farhat said the goal was to increase access to EV charging to encourage adoption of electric vehicles.

“We’re just encouraging across the board implementation,” he said.

Brixie said that it was something she felt the state had to move on carefully.

“The ramifications of our transition to EV vehicles is going to be felt for a long time,” she said. “I’m not convinced that that’s something that needs to be a tax break.”

Rep. Mark Tisdel (R-Rochester Hills) asked if revenues and profits for EVs weren’t going to be enough to cover the costs of the chargers as a capital improvement.

“The proof is in the pudding,” Barryman said. “Right now, my members are getting a bit of a backlog of EVs sitting on the dealerships … and that’s a conversation I’d like to extend with the tax committee about other ways that we can have tax incentives to improve that.”

Tisdel acknowledged the difficult position dealerships were in given what appears to be a low demand for EVs right now.

“I don’t envy the position that the dealers are put in,” Tisdel said. “I see you’re between a rock and a hard place.”

Rep. Greg VanWoerkom (R-Norton Shores) asked why people wouldn’t use the federal incentive for EV charging stations instead. He also asked about updates to the EV chargers.

“Short story: There were winners and losers to who qualifies for the EVs subsidies. We were a loser,” Barryman said.

Farhat said a second draft of the bill would address technology changes to different chargers.

Chase Attanasio, representing Clean Fuels Michigan, also testified in support of the bill.

“Industry and state partners are working diligently to expand Michigan’s EV charging infrastructure,” Attanasio said. “This bill offers an opportunity for Michigan to continue to support property owners who are interested in contributing to the expansion of Michigan’s EV charging network.”

Several organizations submitted cards in support of the bill, including Lucid Motors, Meijer, the Michigan Retailers Association, MICHauto, the Michigan Energy Innovation Business Council and the Michigan League of Conservation Voters.

The Michigan Association of School Boards, the Michigan Municipal League, Oakland Schools and the Michigan Townships Association submitted cards in opposition.

No further action was taken on the legislation Wednesday.