This year has brought several MAJOR developments that will change the way Zero Emission Vehicles (ZEVs) are sold in New Jersey and will significantly impact the way dealerships process these sales.
These changes include:
- The implementation of an EV Registration Fee;
- The gradual elimination of the sales tax exemption for ZEVs; and
- The reduction of the New Jersey Charge Up EV Incentive.
Dealerships will have to navigate these changes and educate consumers.
New EV Registration Fee:
On July 1, 2024, the New Jersey Motor Vehicle Commission (NJMVC) announced the implementation of the new EV Registration Fee, which is effective on July 1, 2024. Pursuant to the law, adopted on March 26, 2024, NJMVC must impose and collect an EV registration fee for purchases and leases, in addition to the existing vehicle registration fee. For 2024, the fee is $250 and increases by $10 on July 1st of each subsequent year, up to and including 2028 (2024-$250, 2025-$260, 2026-$270; 2027-$280 and 2028-$290).
As dealers are aware, new vehicle registrations require payment of the customary registration fee four (4) years in advance. The new EV registration fee will be collected in the same manner- a payment of four years in advance. Therefore, for an EV sold between July 1, 2024 and June 30, 2025, the NJMVC must collect $1060 from the customer for the EV registration fee. The process for leases will not change- for a three-year lease, three years of the EV Registration Fee must be collected.
Dealers do not have to collect the fee until the NJMVC gives the go ahead. NJMVC has said it will send out notices to customers indicating the additional fee for initial and renewal registrations. Dealerships should give each customer a copy of the NJMVC notice so that they are aware of the fee and the process to follow. NJ CAR anticipates that once the programming has been completed, dealerships will be tasked with collecting the fee. STAY TUNED!!!!
The law states that, beginning July 1, 2024, the MVC “shall impose and collect an additional annual fee upon every zero-emission vehicle to be registered”.
NJMVC has clarified that the registration, not the sale or lease date of the vehicle, is the controlling factor in determining whether the fee is applicable. Therefore, if the vehicle is being registered July 1, 2024, and beyond, then the fee would be applicable, regardless of the date of sale.
NJ CAR is advising dealers to disclose this new fee at the time of sale in order to avoid potential legal or customer relations issues down the road.
For dealerships who made EV sales prior to July 1, 2024, and the registration has not been completed, they should send the customer a copy of the NJMVC notice, which can be found HERE.
Phaseout of Sales Tax Exemption for ZEVs:
On June 28, 2024, Governor Murphy approved a law (P.L. 2024, c.19) that phases out the sales and use tax exemption for zero emission vehicles (ZEVs). Starting October 1, 2024, all sales of ZEVs will be subject to sales and use tax of 3.3125%. After July 1, 2025, all sales of ZEVs will be subject to the full sales and use tax amount of 6.625%.
A copy of the new law can be found HERE.
The exemption for the Tire Tax will also disappear on October 1, 2024. As dealers are aware, there was no Tire Tax on the sale of a ZEV because of the sales and use tax exemption.
Reduction of Charge Up New Jersey EV Incentive:
The Board of Public Utilities (BPU) is expected to soon announce a change to the amount of incentive that customers can receive under the Charge Up New Jersey EV Incentive Program.
For 2024, the amount for qualified vehicles with an MSRP under $55,000 will be $2000. This replaces the previous tiered incentive of $4,000 for qualified vehicles with an MSRP under $45,000 and the $2,000 incentive for qualified vehicles with an MSRP between $45,000 and $55,000.
Some customers may qualify for an additional $2000 income-based incentive, if they meet certain modified adjusted gross income (MAGI) levels. It is expected that consumers will need to go through an approval process with BPU to determine their qualification for the $2,000 income-based incentive ($75,000 for single tax filers; $112,500 for head of household tax filers; $150,000 for joint tax filers).
NJ CAR is awaiting the announcement from BPU regarding the launch of the latest iteration of the Charge Up New Jersey EV Incentive Program. More information will provided to dealer members when it becomes available.
If you have any questions on anything discussed above, please contact Greyson Hannigan, NJ CAR Director of Legal & Regulatory Affairs, at [email protected] or (609) 883-5056 – x340.