On Thursday the Oklahoma Tax Commission issued a ruling to “clarify” a tax credit for electric vehicles that has been in effect since the mid-nineties. According to the ruling, vehicles with golf cart or go-cart like bodies or principally designed for sporting or recreation purposes do not qualify for the state tax credit which amounts to 50% of the purchase price and can be spread over five years. Consumers who previously purchased vehicles this year expecting a tax credit may not receive one depending on which vehicle they purchased. As of yesterday the commission had qualified the Wheego and Club Car’s Carryall 2 and Carryall 6 models. Learn more: NewsOK.com

Dealer Roger Gaddis of Ada Electric Cars has filed a lawsuit to get the commission’s ruling revoked. Among the vehicles that Gaddis sells are purpose built LSVs from Tomberlin which, as of now, no longer qualify for the state tax credit, although they did so last year.

I spoke with Mr. Gaddis yesterday and he stated that vehicle owners, other dealers and OEMs have contacted him about turning the lawsuit into a class action. He suspects that the new ruling was made because of an unexpected surge in tax credits related to the vehicles and subsequent lost revenue for the state. Sales of these vehicle have increased significantly fueled by a federal tax credit for 2009 that also applies to LSVs. The combined federal and state tax credits can drop the cost of some vehicles to near zero.

In support of this suspicion Gaddis noted that a tax commissioner had contacted him and wanted to know how many vehicles he had sold. Gaddis responded by asking the commissioner what sales figures had to do with whether vehicles qualify for the tax credit or not. While Gaddis would not provide specific sales figures to the commissioner or myself he told me that sales had improved “dramatically” with the dual tax credits.

Mr. Gaddis also remarked that there has never been a vehicle qualification or certifying process for vehicles to qualify for the tax credit. If the vehicle met NHTSA’s LSV standards than they qualified. Furthermore he stated that the original purpose of the tax credit was to reduce the use of fossil fuels, reduce the use of foreign oil and encourage the use of environmentally friendly vehicles.

I have placed a call with the Oklahoma Tax Commission and hope to speak to them soon. Learn more: Forbes.com,

Learn more: Adaelectriccars.com

Update: I spoke with Paula Ross the spokesperson for the Oklahoma Tax Commission late today.  She said that the emergency ruling was prompted by the large number of requests by people asking if particular vehicles qualified for the state tax credit. Previously only a minimal number of people applied for the tax credit, approximately 100 in 2008. Although the commission is still compiling figures, the number is much higher this year and a greater variety of vehicles are involved than in previous years.  The ruling was meant to clarify the situation but as Ms. Ross noted, it may have caused more confusion.

Right now the commission is gathering data in hopes of understanding the market better and clarifying the situation.  The governor has 45 days to approve the ruling, and until that approval and more information is gathered, the tax commission will refrain from releasing a complete list of qualified vehicles.  Ms. Ross also remarked that the impact on revenue will not influence the qualification of vehicles but could be something addressed by the legislature for 2010. – Marc Cesare