Nearly 4 months ago, Jacob Harb, Head of EV Operation and Strategy BMW North America had told BMW client advisors (a fancy name for salespersons) at BMW dealerships in New Jersey that the i3 REx was sales tax exempt.

Here's our coverage from 4 months back when news of the i3's sales tax exemption broke:

New Jersey Takes the Lead

 Meanwhile, over in New Jersey, the decision has been finalized.  The BMW i3 REx is exempt from sales tax.  The i3 REx joins all of the pure electric vehicles as being sales tax exempt in New Jersey, location of BMW’s North American headquarters.

 For i3 REx buyers in New Jersey, the sales tax exemption is certainly welcome, but again there’s bound to be complaints from non i3 REx buyers.

New Jersey Department of Treasury Taxation Division Sets The Record Straight

Recently, we got wind of an issue in New Jersey in which this exemption was being questioned.  InsideEVs immediately contacted the tax division of the New Jersey Department Of Treasury.  After repeated emails, the conclusion was/is that the BMW i3 REx is not exempt from sales tax.

When asked if it was possible that perhaps the NJ tax division overlooked the i3 REx due to its unique powertrain, the response was the same:

"...if the vehicle does not appear on the DEP's list of qualified zero emission vehicles; the car is not exempt pursuant to N.J.S.A. 54:32B-8.55"

That list, which does not include the BMW i3 REx, is partially reproduced below:

Notice BMW i3 BEV Is Listed Bit i3 REx Is Not

Notice BMW i3 BEV Is Listed Bit i3 REx Is Not

*Entire listing here (PDF)

InsideEVs contacted BMW for comment.  We received an initial reply, which stated that BMW would further investigate and contact us shortly.  We are still waiting for that follow-up response.  Follow-up response received:

"The BMW i3 battery electric model does qualify for the NJ ZEV sales tax exemption. As no car equipped with an internal combustion engine qualifies for the exemption, the i3 with range-extender also does not qualify."

i3 REx Now $8,000 More Than i3 BEV in New Jersey

In essence, not getting the sales tax exemption means that BMW i3 REx buyers will pay $3,000 to $4,000 more than they had expected to pay.  Add in the $3,850 REx option and those in New Jersey are looking at a i3 REx that actually costs them close to $8,000 more out-of-pocket.

BMW i3 REx Sold - Sales Tax Not Charged

The even bigger issue is this: Perhaps a dozen i3 REx vehicles were already sold in New Jersey.  Those vehicles were sales tax exempt per what Harb had told BMW client advisors.  Now, what's to be done with $3,000 to $4,000 in sales tax that's to be owed to the state since the i3 REx is not sales tax exempt?

What Now?

Will i3 REx owners be asked to pay the difference?  Will BMW NA foot the bill?  Or are dealers expected to pay?


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