BREAKING: BMW i3 REx Exempt From Sales Tax In New Jersey

JUL 19 2014 BY TOM MOLOUGHNEY 29

BMW i3 REx Wrapped

BMW i3 REx Wrapped

In a surprising turn of events, the New Jersey Department of Environmental Protection (NJDEP) reversed a previous decision to exclude the i3 REx from the States Tax exemption for zero emission vehicles. This hopefully ends the nearly six month saga from the time it was originally thought the range extended version would indeed qualify, to the announcement shortly after the launch that it would not.

I actually found out a few days after I bought my car that it would not qualify, and I would have to pay $3,921.00 in sales tax. This was totally unexpected and would have actually made the range extender nearly an $8,000 option for me! As much as I love having it, I wouldn’t have agreed to pay that much for it had I known the effective cost would be so high.

*Editor’s Note: This post appears on Tom’s blog.  Check it out here.

For $3,875 I think it’s fairly priced. But $7,800? No way! I even dedicated a blog post to this issue back in May when the surprising (bad) news was announced. I will say never actually ended up paying it all though. That’s because my dealership, JMK BMW realized this was a BMW communication error and not the customers fault. They decided they couldn’t go back and charge customers so much more than they had signed contracts for and they honorably worked out a deal which made everybody happy and nobody cancelled their order. My client adviser, Manny Antunes sold eleven i3s with range extenders so this wasn’t an easy decision but the dealership decided it was better to keep the customers happy than to call them all up and tell them they now owed nearly $4,000 more for sales tax.

However, that wasn’t the case with other dealerships, and I know people that bought REx cars and had indeed paid the every penny of the sales tax and didn’t get any other dealership rebate or credit. They will be very happy when they open the mailbox one day soon and find a nice check in there because this decision is retroactive to May 1st, which is before any i3’s were sold in the US. I was actually the first i3 REx delivery in the US, and that took place on May 21st so all i3 REx cars sold in NJ will indeed qualify for the ZEV tax exemption.

The NJDEP Zero Emission Tax Exemption list has already been updated to include the i3 REx and can be viewed here. Let’s just hope this is the ends the “It’s tax exempt…no it’s not” saga we’ve had here in the Garden State.

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29 Comments on "BREAKING: BMW i3 REx Exempt From Sales Tax In New Jersey"

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Mike

The logic here is simple.
A LEAF owner has a 100 mile range, and typically drives half that or less per day.

An i3 owner with a range extender, could have bought the car to do a 100 mile commute with the expectation that he’d make it with the range extender. His usage of the car is Double that of the typical Leaf owner.

So, the effect of the law change is to encourage more effective usage of EV’s, which benefits the state: Cleaner air, more transportation power funded locally thru utilities, and a probably bump in local solar panel installations. All for the greater good of NJ, economically and environmentally.

It’s good to be flexible.

SIvad
I agree with NJ decision but it does bring up an interesting problem. Should other EVs with range extenders also get a sales tax exemption? If so how much EV range would qualify and how little should the range extender be to qualify? You can see where I am going with this. Technically the i3 REx could be classified as an EREV. Or likewise since the i3 came along the Volt could possibly be classified as an EV with a range extender. This definition will become even weaker as more varying drivetrains come along with varying ranges and range extender sizes. As it stands now the argument would be, well the Volt has such a short EV range that it doesn’t count as an EV with a range extender but is clearly an EREV. However, the technology is changing quickly. The i3 in a few short years will be in the same position of being perceived as having a very short EV range when the newer generation of lower priced 200 mile EVs hit the road. Then the i3 REx will be in a similar position the Volt is in today with half the EV range of most EVs and… Read more »
Mike

One could incentivize the law.
This year every vehicle that runs on 50 miles of electric power qualifies. Then put in an automatic 1 mile increase per year.

This would drive manufacturers to meet and then to improve their EV’s and EREV’s.

You want it to increase but not too much, because you also want the general public to become aware of the law and to take advantage of it, with as many cars possible.

no comment

if you look at the footnotes in the list, the criteria that you cite is apparently not the criteria used by the state of new jersey. in the case of the BMW i3 REx, my guess is that it probably made the list because the EV range is greater than the gasoline range, which could lead to the conclusion that its primary use is as a BEV. to put this in context, it would be difficult to own a BMW i3 REx if you did not have access to an outlet for recharging. by contrast, you could own a Chevrolet Volt under those conditions with little problem.

SIvad

But again that is arbitrary. By that metric if you had a EREV that had a 150 mile EV range and a range extender that gave you 160 miles it wouldn’t qualify under that definition even though it has a much longer EV range than the i3 REx.

no comment

anything is possible, but with the expense of developing an automobile, the decision to make one is not arbitrary. if a company were to make a PHEV such as you described there is an underlying motivation to do so (which includes regulation-based motivations).

Jim

BMW stepped up spent the money- its really that simple. NJDEP saw the advantage in being a partner with a manufacture that is willing to invest in clean air , the credit is reasonable. Other manufacturers will follow BMW in densely populated states if they want the same tax advantage. I think it all comes down to the consumer which is in a way sad to think that there are people out there that spend their time calculating emissions and MPG.

no comment

that is what is so surprising about this. if you look at the list, the BMW i3 REx is the only PHEV on the list. i suppose that the BMW i3 REx is treated differently from the Volt because the EV range in the i3 is greater than the gasoline range. the opposite is true for the Volt.

SIvad

So what if the Volt had a 150 mile EV range and a 160 mile ICE range extender? By that definition it wouldn’t qualify for the tax exemption even though it was superior in EV range compared to the i3 REx. Or what if the Volt had it’s current 38 mile EV range and a range extender that gave you only 37 miles. Should it then qualify for the sales tax exemption even though it is inferior in performance?

Mikael

That is why a minimum range of electricity and a maximum effect on the range extender would work great.

But you could always have the “if the EV range is longer than the ICE range, then it’s automatically an EREV”-rule too. No matter your example since no one would ever put out a 35 mile EV + 34 mile ICE on the market anyway, so the example you gave is very useless in the real world.

It’s not that hard to define an EREV if you actually think about it.

Mikael

No one would buy a 40-50 mile pure EV.

To be classified as an EREV you could hardly have less than 75 mile EPA on electricity and not have a range extender above 50 kW.

It’s very easy to tell that the i3 REx is an EREV since it’s sold as a pure EV and then just has the range extender as an added option.

SIvad

The Volt has an EPA EV range of less than 75 miles and it is classified as an EREV. Like I was saying above, the 75 miles EV range is arbitrary for the technology as of 2014. In a couple of years it will be common for affordable EVs to have a range of 200 miles. So the standard of what is an exceptable EV range will change.

Mikael

The Volt is definitely not an EREV. No one in their right mind would ever clasificate it like that. The only EREV out on the market is the i3 REx so it will also be part of seting some standards.

That is why you should have some basic rules for an EREV. It will be arbitrary rules but a lot is arbitrary in this world and it’s not like it’s fair if a Prius PHEV and a i3 REx ended up in the same category.

flmark

THIS IS ABSOLUTE CRAP!!!

I type this while killing time hooked up at a Level 2 EVSE halfway thru my 120 mile trip from my mother in laws to back home. If I have time to kill, I pull out the smart phone & catch up on the headlines while avoiding some gasoline usage.

This is the perfect trip to shut up all the ‘purists’ out there. All but Tesla owners (currently) would have to burn SOME gas on this trip w/o a charging stop. In my EXTENDED RANGE Volt, I burn less gas than EV owners who default to a NON electric vehicle. I average about 80 mpg if I don’t make this EVSE stop.

Mikael

It’s great. Your PHEV can get a lot of the miles on electricity if used right. Just like you can do with the Outlander PHEV when used right.
It would be awsome if all PHEV’s could get a decent range like the Volt. Unlike the joke Prius plug-in.

It still doesn’t make it an EREV.

no comment

does the gasoline engine in the Volt allow you to drive for extended range beyond what you can drive on a single charge?

your insistence that the Volt is not an EREV makes about as much sense as denying that the earth is round.

flmark
You simply cannot make up your own syntax for what your value system dictates. GM coined the phrase FOR THE VOLT…and it fits. It is an ELECTRIC VEHICLE with EXTENDED RANGE. It was DESIGNED to be driven PRIMARILY by electricity. This article is about a BMW with the SAME CAPABILITY (although much more muted). It does not matter how big of a gas tank you put or (apparently by your definition???) the HP associated with that range extender. It is obvious that you started this commentary with your own dialect, and I doubt I will dissuade you from it. But your comment indicates that everyone else thinks like you do about the Volt…and we do not. I bought my Volt to use as an electric vehicle, but with a necessary attachment to get me through the common trips of 120 miles that I make. I put the moniker ‘purist’ in quotes for a reason. Those who stick their noses up in the air at the Volt as NOT an EV…and then turn around and resort to a gas burner for longer trips are HYPOCRITES!!!The Volt is the ONLY true EREV…this Beamer has an anemic limp-along range extender to get you… Read more »
sven

“No one would buy a 40-50 mile pure EV.”

That’s why only 71 Scion iQ EVs were ever sold. But the $45,000 price tag might have something to do with it also. 😀

no comment

when you buy a BMW i3, you are probably looking at a BEW that gets 40-50 miles of range during the winter in colder climate regions. this is one thing that is very important for potential purchasers of electric vehicles (and especially purchasers of BEVs) to understand: there are seasonal variations in the amount of range that you will get, and running the heater significantly reduces range.

seasonal variations are less in areas with less seasonal variation, which helps explain why BEV sales tend to be concentrated in certain areas on the country.

Mikael

“… but is clearly an EREV”

Here is where you get it wrong. The Volt is a PHEV, a series hybrid. And just because you are a series hybrid doesn’t automatically make you an EREV.
And just because the manufacturer wants it to have a label it doesn’t automatically make it true.
If Elon would call the Tesla a space ship NASA and ESA would still not classify it as anything but a car.

no comment

this statement makes no sense.

flmark

…and you keep using this phrase…I don’t think you understand the Volt. Some PHEVs (that you are apparently referring to), turn on their engines when the accelerator pedal is pushed too hard. That is NOT the case for the Volt. FLOOR IT if you want; go up to (electrically limited) 100 mph. It’s still ALL ELECTRIC. Until that approx. 10kwh of battery is used up, it is a PURE ELECTRIC VEHICLE. Do you understand yet??

ModernMarvelFan

GM “coined” the phrase EREV with the Volt. So, I think it has some merit.

By definition, the Volt is EREV or can be, unlike other PHEVs…

YOu can make a case that i3 with REx is a “stronger” EREV. But technically speaking, i3 with REx is NOT EREV as its REV performance is significantly below of that E-portion.

i3 REx is BEVx (carb definition).

Volt is EREV.

Mark H

To quote another famous New Jersey native. “Someday we’ll look back on this and it will all seem funny..”

sven

Did Governor Chris Christie really say that about shutting down lanes at the George Washington Bridge?

Mikey

NJ: “Screw you Tesla!”

The Model S has always been available with no sales tax. That was the true irony in the ban on the sales. You could order your Model S in NY, then bring it back to NJ and register it, paying no sales tax.

The ban on sales had no effect on the status of no sales tax.

Big Solar

NJ did something good. yay!

YC

New Jersey adopts the California certification standard. Here are the conditions eligible to be considered as a ZEVx vehicle under the certification criteria under California Air Resource Board:

1. It has to be a Partial Zero Emission Vehicle (PZEV), with zero evaporative emission;

2. It has to be having a minimum Type G additional advanced componentry allowance, i.e. having a zero-emission Vehicle Miles Travel greater or equal to 10 miles in the aggressive US06 drive cycle. US06 reaches as high as 80 mph over parts of the 10 minutes cycle;

3. The users cannot select the driving mode to use the Auxiliary Power Unit (APU) until the battery range is fully depleted. The APU range cannot be more than the battery range;

4. They have to be having a minimum Zero Emission Range of greater or equal to 75 miles ( and less than 100 miles) for Type 1.5X or greater or equal to 100 miles for Type IIx.

So, BMW i3-REX is really the unique one in 2014.