Full federal tax credit in Texas - Will it require only full payment to qualify or delivery and in hand?

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Full fed tax credit in Texas - Will it require only full payment to qualify or delivery and in hand?


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GDN

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#1
Many of you are familiar with the crazy Texas laws (some other states are similar) of having to pay for the Tesla before it leaves CA. I've got an internal struggle that may be getting real. I may be about ready to sell and give up my pickup for a second model 3. If I pull the trigger, I've obviously missed the October 15 guaranteed delivery date from Tesla, but they say delivery is 4 to 8 weeks. If I'm paid in full by December 31 but not taken delivery (it is in shipment) do you think I would qualify for the full $7,500 or do you think I would have to have true delivery in hand for the car to qualify for the full rebate.

EDIT - I have looked at the Federal sites and if you look at the instructions for for 8936 (2017) you get this:
Certification and Other Requirements
Generally, you can rely on the manufacturer’s (or, in the case of a foreign manufacturer, its domestic distributor’s) certification to the IRS that a specific make, model, and model year vehicle qualifies for the credit and, if applicable, the amount of the credit for which it qualifies. The manufacturer or domestic distributor should be able to provide you with a copy of the IRS letter acknowledging the certification of the vehicle.


If you look at the actual form you get this: Enter date vehicle was placed in service (MM/DD/YYYY)
 
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Feathermerchant

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#2
Does Texas have a $7,500 tax credit? There is no income tax in Texas. There is no residential state property tax in Texas. How would you qualify for a tax credit?
Do you have any links?
 

GDN

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#3
This is for the Federal Tax Credit and we definitely qualify, but the amount will go down from $7500 to $3750 on January 1. I'm just trying to determine what dictates when we get our car - when paid for or when we drive it out of the Service Center.. There is also a state credit for EV's purchased from a dealership, Bolt's and other EV's qualify, but not Tesla's because we don't "Buy from a dealership".
 

Feathermerchant

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#4
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garsh

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#6
I'm just trying to determine what dictates when we get our car - when paid for or when we drive it out of the Service Center.
The answer is a bit more pragmatic - "documentation" dictates it.

As @Feathermerchant says, the date on the title is what's going to be used. So make sure Tesla puts a December date on it, and you'll be set. :)
 

Dr. J

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#7
If it were me, I would want to take delivery by Dec. 31, 2018 to take the full federal tax credit. That's what I believe is meant by "placed in service." I believe the title date is a red herring, but that's just me. The only person who's voted so far. :)

Edit:

And here's why I think the title date is a red herring (in Texas), quoting from my post on TMC:

the length of time the title transfer takes has nothing to do with when title passes to the buyer--at least in Texas, <snip>. Section 501.0234(f) of the Texas Transportation Code says in part:

"....equitable title to a vehicle passes to the purchaser of the vehicle at the time the vehicle is the subject of a sale that is enforceable by either party." 2005 Texas Transportation Code CHAPTER 501. CERTIFICATE OF TITLE ACT

When does a vehicle purchase become enforceable by either party? When money and the "keys" change hands, i.e. at delivery. At least in Texas, this whole debate is a lot simpler than folks are making it out to be. And I believe the 200,000 threshold and the start of phase out less than two quarters later depends on the same measurement--delivery of the vehicle.
/end

But IANAL.

Further edit: If I were a lawyer and paid for my California sale vehicle and had an executed MVPA in December, and delivery was delayed into January, I might make the argument I was entitled to the full credit based on the sale agreement being enforceable as of Dec. 31, 2018. But I expect none of this will apply to me, especially since I'm not even enrolled in law school this (or any) semester. :D
 
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FRC

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#8
Generally, the "date placed in service" is the delivery date and the date that title becomes yours, so there is no difference. My understanding is that, in Texas, title transfers, and thus, the vehicle is considered to be "placed in service" , on the date that you make full payment due and complete the paperwork. For Texans, the car is yours completely as it begins it's transit to you. If it is destroyed in transit, it's still your car(although I'm fairly certain that Tesla has insured you for this possibility). In brief, since the great state of Texas forbids your purchase inside the state, you are considered to have made purchase at the factory when payment is made and paperwork complete. Do not, however take this to mean that you can pre-pay and get the credit; the car and the paperwork must also be complete.
 

Dr. J

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#9
Generally, the "date placed in service" is the delivery date and the date that title becomes yours, so there is no difference. My understanding is that, in Texas, title transfers, and thus, the vehicle is considered to be "placed in service" , on the date that you make full payment due and complete the paperwork. For Texans, the car is yours completely as it begins it's transit to you. If it is destroyed in transit, it's still your car(although I'm fairly certain that Tesla has insured you for this possibility). In brief, since the great state of Texas forbids your purchase inside the state, you are considered to have made purchase at the factory when payment is made and paperwork complete. Do not, however take this to mean that you can pre-pay and get the credit; the car and the paperwork must also be complete.
I think you may be right, but I'm conservative on what I claim on my income tax form--I would still want to have taken delivery. I definitely would not worry about how long the title recordation process takes (the subject of discussion on the other forum).
 

FRC

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#10
I agree that you don't want to try to explain to the IRS that you are the exception to the general rule. However, if it happens that way, don't be shy about doing so. I believe you'll likely have the required documents in hand by filing time, even if you don't get your car before 12/31. I'd argue with the IRS over $3,750 in a heartbeat if necessary!
 

LUXMAN

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#11
@GDN
Being in Texas and registrations has nothing to do with it.
Speaking from experience filing in 2015 for my LEAF, you fill out FORM 8936 and need to indicate the DATE PLACED IN SERVICE and the VIN.

The DATE isn't addressed in the instructions but a reasonable person would take this as the delivery date.

Now it does say this in the instructions....

The following requirements must be met to qualify for the credit.
You are the owner of the vehicle. If the vehicle is leased, only the lessor and not the lessee, is entitled to the credit.
You placed the vehicle in service during your tax year.
The original use of the vehicle began with you.
You acquired the vehicle for use or to lease to others, and not for resale.

I would say you have to take delivery this year. So order NOW!

[mod edit]

But seriously, I see guys on Twitter getting their cars in a week. But I am assuming you are speaking of a MID-RANGE model from earlier discussions....
 

FRC

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#12
Consult a CPA in Texas. I am a CPA in Georgia, and I believe the car is actually "placed in service" in your case in California when payment is made and MVPA is executed.
 

GDN

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#13
Thanks for all of the feedback. I truly believe and have also chimed in earlier in the year that when the car is paid for (which happened while the car is in CA) then that would end up being the title date and as well would be the placed in service date. I respect all opinions as there could be a little bit of wiggle room, but I know I would want a VIN and the car paid for by a few days before the end of the year to be comfortable. I seriously doubt Tesla could also ship it and get it in my hands by 12/31, but they could surprise me.

This forum is a great place and I appreciate all input. I know it will likely be a chance I'm taking, but should have made the decision 2 weeks ago.

@LUXMAN - actually would be looking at the LR AWD now. I just don't think anything less on range would be good for what I want out of the car and for resale.

To everyone else - you've seen my struggle with not wanting to give up my pickup, even @MelindaV suggested Turo, but I'm not sure I would have time for pickup and drop off working an office job 5 days a week and not able to be home. It's a tough decision to make sure I have vetted on both side. The Model 3 is such an awesome car, I'm OK being a two Tesla family, but just struggle not having a pickup, that is all I've driven for 25 years. Thanks for letting me live this out here, I'm very close, but haven't taken the leap yet, it will have to happen this week however, so if I haven't taken the leap by then, I'll put this behind us and do my best not to bring it up again.
 

garsh

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#14
The Model 3 is such an awesome car, I'm OK being a two Tesla family, but just struggle not having a pickup, that is all I've driven for 25 years.
I think the obvious answer in your case is to wait three more years and then purchase the Tesla pickup.

And if the pickup isn't quite ready yet, get a Tesla Semi instead. ;)
 

GDN

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#15
I think the obvious answer in your case is to wait three more years and then purchase the Tesla pickup.

And if the pickup isn't quite ready yet, get a Tesla Semi instead. ;)
I love people thinking outside the box, but I hate it when it makes me think crazier things. I just checked, seems the Semi estimated price is actually cheaper than the roadster. I haven't hit the lottery, so the Roadster is out, maybe invest in a semi and just go to the tracks and race it?
 

SoFlaModel3

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#17
I would say for sure it's based on "delivery date" as that is the date that the vehicle is officially put into service. Of course registration can take a few weeks to officially go through, but that shouldn't matter.
 

LUXMAN

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#18
I love people thinking outside the box, but I hate it when it makes me think crazier things. I just checked, seems the Semi estimated price is actually cheaper than the roadster. I haven't hit the lottery, so the Roadster is out, maybe invest in a semi and just go to the tracks and race it?
Well you could get yourself an adorable chimp and become an indie driver righting the wrongs of the open road....

Just like our heroes....

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