[sfi4]

Originally Posted by bavarianride

It seems that people feel entitled to the EV tax credits, and all become crybabies when the fed realigns it with the rest of the clean energy stuff.

Do note that both IRA and IRS clearly follow the 10th amendment, namely, the state's legislation (not the fed's) determines how everyone in its jurisdiction is equally treated (per 14th). It is up the people in each jurisdiction to act/plan accordingly.

E.g. when bay cruise leaves SF/state jurisdiction to enter fed water, those who light up need to act accordingly, or else the coast guard can board to arrest them.

I don’t think that’s quite fair. There’s a severe supply chain issue impacting the entire auto industry, and a ton of Americans who put deposits down on vehicles at all sorts of price points, who have been waiting months for production and delivery, and who were expecting to pay a (net) certain price for that vehicle. Whatever that amount is, adding $7,500 to it is not an inconsequential amount of money for many in that situation, and pulling the rug out from under them sure stings. On top of that, the impact of inflation and increasing vehicle costs adds yet more financial pain. Overall, the impact is disincentivizing for many. It wouldn’t have been difficult for the government to recognize this situation and carve out a better approach to phase-in, or for that matter, enough time for manufacturers to react, communicate and help their customers. It’s an awful way to make such a substantial change given the circumstances, and I don’t think that calling folks “crybabies” for reacting to poorly written legislation (which it is, as regards alternative fuel vehicles) is appropriate.

[bavarianride]

Originally Posted by sfi4

It’s an awful way to make such a substantial change given the circumstances, and I don’t think that calling folks “crybabies” for reacting to poorly written legislation (which it is, as regards alternative fuel vehicles) is appropriate.

I truly appreciate your candid and polite reply.

To further explore, let's not forget one of the goals of Inflation Reduction Act is to reduce deficit, and I do see the IRA's EV credit provisions as raising taxes(or unrolling the freebies?) to fund QT.

To paraphrase, the legislators can no longer pay up to lavishly intervene free market, as they need money too.

It feels that most folks here mourning the loss of $7500 tax credits on their custom build $70k-$80k i4 will not be materially affected.

Some may cancel to find better deals elsewhere, but that's just un-intervened(i.e. reduced credits) free market forces.

On the other hand, if a buyer truly gets affected by an additional $7500 on a $70k-$80k order, IRA can be a great opportunity to pause and regroup.

[bavarianride]

To provide a few data points of free market forces, one local dealer drops the i4 markup from $10k to $5k post-8/16, and another is selling @msrp for immediate delivery on cancelled i4 (eDrive 40) orders.

So IRA already saves me $2.5k with no wait, what's not to like?

[techwhiz1]

Originally Posted by usmabmass

This is such a weird "equal protection" argument. You dont have a civil right to an EV rebate. The IRS will grant the rebate to anybody that has a binding agreement, per the law.

If you dont have one/cant get one because your state doesnt let you, that is a shortcoming of your state's law. The fed government doesnt have to grant you special tax status because you cant get what you need in your state.

If you want to file a lawsuit, it sounds like you should try suing your state but it sounds super goofy lol

Originally Posted by bavarianride

It seems that people feel entitled to the EV tax credits, and all become crybabies when the fed realigns it with the rest of the clean energy stuff.

Do note that both IRA and IRS clearly follow the 10th amendment, namely, the state's legislation (not the fed's) determines how everyone in its jurisdiction is equally treated (per 14th). It is up the people in each jurisdiction to act/plan accordingly.

E.g. when bay cruise leaves SF/state jurisdiction to enter fed water, those who light up need to act accordingly, or else the coast guard can board to arrest them.

I'm entitled to the tax benefits that are available to others in like circumstances and it has nothing to do with being a crybaby. If nobody gets it fine. If the qualification was income like it changes to, fine. California has had an income cap and I'm fine with it.

If the fed just stopped the credit, then so be it.
To create a documentation impossibility flies in the face of good taxation policy.

And no the 10th does absolve the fed in tax policy. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The tax credit falls directly in the federal jurisdiction. The state prohibits the documents that the fed wants but does not ban the credit.

The credit therefore has to be available to all citizens in like circumstances.

You can't call it whining when all people want is the exact same benefit offered to others in like circumstances.

Like I said, people will talk to their individual tax folks and determine what to do.

We'll agree to disagree.

[Technic]

Don't feed the ****** trolls.

[bavarianride]

Originally Posted by techwhiz1

And no the 10th does absolve the fed in tax policy. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The tax credit falls directly in the federal jurisdiction. The state prohibits the documents that the fed wants but does not ban the credit.

The credit therefore has to be available to all citizens in like circumstances.

Inquisitive minds love to agree to disagree, right?

As u mentioned, the fed is granted the power to levy federal income tax according to the 16th amendment, and the fed also specifies what document they need. But the fed does honor the state's jurisdictions on the definition of the documents per 10th, and all citizens in each jurisdictions are treated equally per 14th.

I don't see any discrepancy on this in both state and fed levels, but I guess one can always try.

BTW, another inquisitive mind@work jokingly suggested that BMWNA should have run a floating office in fed water so that SF folks can ferry out to sign a direct order with non-refundable down payment.

[TurtleBoy]

Originally Posted by Technic

Don't feed the ****** trolls.

There is a reason I have him on Ignore. His goal seems to be to mislead, misinform and most of all create fiction and friction.

[scLA]

Originally Posted by techwhiz1

I'm entitled to the tax benefits that are available to others in like circumstances and it has nothing to do with being a crybaby. If nobody gets it fine. If the qualification was income like it changes to, fine. California has had an income cap and I'm fine with it.

If the fed just stopped the credit, then so be it.
To create a documentation impossibility flies in the face of good taxation policy.

And no the 10th does absolve the fed in tax policy. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The tax credit falls directly in the federal jurisdiction. The state prohibits the documents that the fed wants but does not ban the credit.

The credit therefore has to be available to all citizens in like circumstances.

You can't call it whining when all people want is the exact same benefit offered to others in like circumstances.

Like I said, people will talk to their individual tax folks and determine what to do.

We'll agree to disagree.

The one question I have as a CA resident is are we 100% sure this statement is accurate - "The state prohibits the documents that the fed want"?

I've seen the statutes that prohibits brokers from taking a non-refundable deposit, but where is the statute that prohibits California car dealers from taking a non-refundable deposit of 5% or more? I do not believe car dealers and brokers are the same thing and I've seen references to dealers needing to apply for an endorsement to their business line to become a car broker.

Many people have referenced on this and other car forums that CA dealers are prohibited from doing what the IRS requested, but I would like to see the actual text of the law / car dealer rules that verifies it (and would really like to have it if I get audited for taking the credit). If anyone can find it we'd all be very grateful!

[bavarianride]

Originally Posted by slazLA

If anyone can find it we'd all be very grateful!

CA vehicle code 11736, 11737, and 11738(and others too?), please report back your interpretations of the language, happy reading.

My interpretation is that what we sign as order sheet in CA dealer is just a brokering(service) agreement with refundable deposit.

What IRA and IRS ask for is either a brokering(service) agreement with at least 5% non-refundable deposit(per state legislation), or a purchase agreement that shows buyer is 100% committed.

[TurtleBoy]

Originally Posted by slazLA

The one question I have as a CA resident is are we 100% sure this statement is accurate - "The state prohibits the documents that the fed want"?

I've seen the statutes that prohibits brokers from taking a non-refundable deposit, but where is the statute that prohibits California car dealers from taking a non-refundable deposit of 5% or more? I do not believe car dealers and brokers are the same thing and I've seen references to dealers needing to apply for an endorsement to their business line to become a car broker.

Many people have referenced on this and other car forums that CA dealers are prohibited from doing what the IRS requested, but I would like to see the actual text of the law / car dealer rules that verifies it (and would really like to have it if I get audited for taking the credit). If anyone can find it we'd all be very grateful!

I have looked and have not been able to find anything that says binding contracts for vehicles prior to purchasing are prohibited but could have missed it. It does address non-refundable deposits (both refund-ability and limit) but those are not required in order to make the contract binding. It seems you could create a contract with either specified damages of at least 5% of the contract price or some other type of damages based on lost revenue, dealer costs, trade in value, etc. and it would qualify as a written binding contract.

[bavarianride]

Originally Posted by slazLA

....but where is the statute that prohibits California car dealers from taking a non-refundable deposit of 5% or more?

Also note that CA CDTFA's pub34 says this, which means a retail dealer is also a broker, and requires an auto-broker endorsement(from CA DMV) to broker retail sales transactions.

That is why(per my interpretation) that the brokering agreement codes(11736-11738) apply to the dealer's order sheet we sign.

"Brokers
A broker is a retailer if you have the power to transfer title to property, and exercises it, either:
• By holding title to the property before its sale,
• By completing a bill of sale to the buyer under power of attorney from the legal owner, or
• By getting a signed bill of sale from the legal owner and delivering it to the buyer.
When entering any transactions in which you have the power to transfer title to a vehicle, you are a retailer in those
transactions, and must hold a seller’s permit."

[techwhiz1]

Originally Posted by TurtleBoy

I have looked and have not been able to find anything that says binding contracts for vehicles prior to purchasing are prohibited but could have missed it. It does address non-refundable deposits (both refund-ability and limit) but those are not required in order to make the contract binding. It seems you could create a contract with either specified damages of at least 5% of the contract price or some other type of damages based on lost revenue, dealer costs, trade in value, etc. and it would qualify as a written binding contract.

In California the dealer/broker cannot bind you to purchase a vehicle without the vehicle. Even then a purchase contract is non-binding even after it is signed. Until the car is driven off the dealer lot a customer cannot be bound and no damages can be collected.

Dealers act as brokers until they have a car and deposits are capped at 2.5%. Those are fully refundable and a broker can charge a fee, but that's it.

There are no lost revenue contracts as those would be forbidden because you can't bind the person to take delivery of a car, even when the car is at the dealer. I can literally sign the paperwork and drive the car around the lot, then change my mind. I can then tear up the contract, get my money back and walk away.

It is not possible for a dealer in California to write a binding contract that does not include a "purchase contract" and driving the car off the lot.

[bavarianride]

Originally Posted by techwhiz1

In California the dealer/broker cannot bind you to purchase a vehicle without the vehicle. Even then a purchase contract is non-binding even after it is signed. Until the car is driven off the dealer lot a customer cannot be bound and no damages can be collected.

Do u have the link to the CA code on "driving off the dealer lot" requirement?

If that statement is true, how will Fisker's purchase agreement be considered binding then for IRA and IRS?

Fisker's HQ is in Manhattan Beach, so it appears it is still under CA jurisdiction.

[TurtleBoy]

Originally Posted by techwhiz1

In California the dealer/broker cannot bind you to purchase a vehicle without the vehicle. Even then a purchase contract is non-binding even after it is signed. Until the car is driven off the dealer lot a customer cannot be bound and no damages can be collected.

Dealers act as brokers until they have a car and deposits are capped at 2.5%. Those are fully refundable and a broker can charge a fee, but that's it.

There are no lost revenue contracts as those would be forbidden because you can't bind the person to take delivery of a car, even when the car is at the dealer. I can literally sign the paperwork and drive the car around the lot, then change my mind. I can then tear up the contract, get my money back and walk away.

It is not possible for a dealer in California to write a binding contract that does not include a "purchase contract" and driving the car off the lot.

Your citation?

[bavarianride]

Originally Posted by techwhiz1

In California the dealer/broker cannot bind you to purchase a vehicle without the vehicle. Even then a purchase contract is non-binding even after it is signed. Until the car is driven off the dealer lot a customer cannot be bound and no damages can be collected.

Dealers act as brokers until they have a car and deposits are capped at 2.5%. Those are fully refundable and a broker can charge a fee, but that's it.

There are no lost revenue contracts as those would be forbidden because you can't bind the person to take delivery of a car, even when the car is at the dealer. I can literally sign the paperwork and drive the car around the lot, then change my mind. I can then tear up the contract, get my money back and walk away.

It is not possible for a dealer in California to write a binding contract that does not include a "purchase contract" and driving the car off the lot.

This post is all factual according to CA CDTFA's pub34 and CVC 11736-11738, except for "sign the paperwork and drive the car around the lot, then change my mind" statement.

CVC 11709.2 says this, which contradicts that that purchaser can sign and then back out without leaving the lot(other than seller agrees, or seller commits fraud/etc, etc)

"After you sign a motor vehicle purchase or lease contract, it may only be canceled with the agreement of the seller or lessor or for legal cause, such as fraud."

[techwhiz1]

Originally Posted by TurtleBoy

Your citation?

We have hashed this over and over; it's in California Vehicle Code 11736

A dealer acts as a broker when not in possession of the actual vehicle. A dealer is only a dealer when they have the vehicle.

The sales manager at my dealer confirmed, no contracts because they are not binding.

Purchase contracts for vehicles can be cancelled up to the point that you drive the car off the lot. All monies must be returned.

I don't know why it's so difficult for people to wrap their heads areound that in California and Washington dealers cannot take a deposit that is non-refundable? All conditional purchase contracts a require a VIN and full description. Non-binding until you drive off the lot. No VIN, no contract.

[bavarianride]

Originally Posted by techwhiz1

We have hashed this over and over; it's in California Vehicle Code 11736

A dealer acts as a broker when not in possession of the actual vehicle.

The sales manager at my dealer confirmed, no contracts because they are not binding.

That is correct. In addition, non-CA posters do not understand that CA codes require CA retail dealers to act as broker in order to broker retail sales transaction.

In fact, CA retail dealer must have a auto-broker endorsement from DMV.

However CVC 11709.2 says once signed, u cannot cancel, so your statement of "sign, then drive around the lot, then change your mind" does not appear to be correct.

[TurtleBoy]

Originally Posted by techwhiz1

We have hashed this over and over; it's in California Vehicle Code 11736

A dealer acts as a broker when not in possession of the actual vehicle. A dealer is only a dealer when they have the vehicle.

The sales manager at my dealer confirmed, no contracts because they are not binding.

Purchase contracts for vehicles can be cancelled up to the point that you drive the car off the lot. All monies must be returned.

I don't know why it's so difficult for people to wrap their heads areound that in California and Washington dealers cannot take a deposit that is non-refundable? All conditional purchase contracts a require a VIN and full description. Non-binding until you drive off the lot. No VIN, no contract.

I know it has been hashed over and no one has been able to provide a citation of the law that prohibits binding contracts. Even if 11736 applies, nothing in there prohibits them.

I really don't care one way or the other since I won't be the one getting audited but others who may be in the situation are looking for something to stand on. So far we have not seen that.

For reference, CVC 11736:

It is unlawful for any dealer licensed under this article to do any of the following when brokering a retail sale:

(a) Fail to execute a written brokering agreement, as described in Section 11738, and provide a completed copy to both of the following:

(1) Any consumer entering into the brokering agreement.  The completed copy shall be provided prior to the consumer's signing of an agreement for the purchase of the vehicle described in the brokering agreement or, prior to accepting one hundred dollars ($100) or more from that consumer, whichever occurs first.

(2) The selling dealer.  The completed copy shall be provided prior to the selling dealer's entering into a purchase agreement with the consumer.

(b) Accept a purchase deposit from any consumer that exceeds 2.5 percent of the selling price of the vehicle described in the brokering agreement.

(c) Fail to refund any purchase money, including purchase deposits, upon demand by a consumer at any time prior to the consumer's signing of a vehicle purchase agreement with a selling dealer and taking delivery of the vehicle described in the brokering agreement.

(d) Fail to cancel a brokering agreement and refund, upon demand, any money paid by a consumer, including any brokerage fee, under any of the following circumstances:

(1) When the final price of the brokered vehicle exceeds the purchase price listed in the brokering agreement.

(2) When the vehicle delivered is not as described in the brokering agreement.

(3) When the brokering agreement expires prior to the customer being presented with a purchase agreement from a selling dealer arranged through the brokering dealer that contains a purchase price at or below the price listed in the brokering agreement.

(e) Act as a seller and provide brokering services, both in the same transaction.

(f) Fail to disclose to the consumer and selling dealer, as soon as practicable, whether the autobroker receives or does not receive a fee or other compensation, regardless of the form or time of payment, from the selling dealer and the dollar amount of any fee that the consumer is obligated to pay to the autobroker.  This arrangement shall be confirmed in a brokering agreement.

(g) Fail to record in the dealer's autobroker log, for each brokered sale, all of the information specified in subdivision (c) of Section 11735.

(h) Fail to maintain for a minimum of three years a copy of the executed brokering agreement and other notices and documents related to each brokered transaction.

(i) Fail to advise the consumer, prior to accepting any money, that a full refund will be given if the motor vehicle ordered through the autobroker is not obtained for the consumer or if the service orally contracted for is not provided.

[bavarianride]

It feels that many (including myself) reading this thread are from CA, and are confused by non-CA posters who haven't read through CVC and misc. pub's, and yet assume their interpretations and understandings apply to CA folks.

My suggestion is that the non-CA (and CA)posters should carefully read pub34, CVC 11736-11738, 11709.2(heck, just read the whole thing 11700-11740), and CFR § 1.168(k)-1(b)(4)(ii)(A)-(D).

My(and coworkers pondering on their i4 orders) interpretation of the above is as follows:

1. CA retail dealer is also a broker, and requires an auto-broker endorsement from DMV to broker retail sales transaction.
2. CVC allows retail dealer to write brokering (service) agreement with refundable deposit, but CA's brokering agreement is non-bidding per IRS for tax purpose.
3. CA retail dealer can write bidding purchase agreement(with unlimited damage, or damage limited to at least 5% of contract price) when the VIN is available/inbound. This can satisfy IRS for tax purpose.
4. Once purchase agreement is presented to buyer, any previous brokering agreement expires.
5. Once the purchase agreement is signed, the buyer cannot cancel unless seller agrees, or for legal reason(e.g. the seller commits fraud)(so don't sign then drive around the lot then hope to cancel)

This is what we read from the convoluted languages, feel free to correct/ignore as u see fit.

[bavarianride]

Relevant CA legislations are summarized in this thread:

https://bmwi.bimmerpost.com/forums/s....php?t=1948826

For my coworkers with no VIN but brokering agreements with refundable deposits, all the talk from non-CA posters w.r.t. binding contract is distracting and misleading.

[techwhiz1]

There is nothing to explicitly prohibit them, but a contract not for a legal purpose, is not legal. That is written into California Civil Code.


Deposits are refundable and it is not legal to hold them once a person changes their mind.
It is not legal to write an agreement that has forfeiture of the deposit.

You can back out of a purchase contract until you drive off with the car.

Those conditions make any thought of a binding contract not possible.

One condition of a valid contract is that you should be able to sue for "specified performance" forcing the execution of the contract. There is no underlying condition that would allow a dealer to sue as long as the car is on the lot. And no way to recover damages for a sale that does not go through.

I can fill out all the paperwork and give the dealer a check for the full price of the car. Unless I drive the car off the lot, I can rip up the signed contract and ask for my money back.

It's not your car until you drive away; at least in California.

If you can't force specified performance or get damages, by definition the contract isn't binding.

California dealers use an approved non-binding purchase contract that has fixed language.

So once again, a binding contract is no contract because the customer cannot be bound by it. Therefore it is not a legal contract and a dealer is not going to write a contract for something not legal.

Are we done yet??

[scLA]

Originally Posted by techwhiz1

There is nothing to explicitly prohibit them, but a contract not for a legal purpose, is not legal. That is written into California Civil Code.


Deposits are refundable and it is not legal to hold them once a person changes their mind.
It is not legal to write an agreement that has forfeiture of the deposit.

You can back out of a purchase contract until you drive off with the car.

Those conditions make any thought of a binding contract not possible.

One condition of a valid contract is that you should be able to sue for "specified performance" forcing the execution of the contract. There is no underlying condition that would allow a dealer to sue as long as the car is on the lot. And no way to recover damages for a sale that does not go through.

I can fill out all the paperwork and give the dealer a check for the full price of the car. Unless I drive the car off the lot, I can rip up the signed contract and ask for my money back.

It's not your car until you drive away; at least in California.

If you can't force specified performance or get damages, by definition the contract isn't binding.

California dealers use an approved non-binding purchase contract that has fixed language.

So once again, a binding contract is no contract because the customer cannot be bound by it. Therefore it is not a legal contract and a dealer is not going to write a contract for something not legal.

Are we done yet??

Only question then is can we check the box on an IRS form that asks if we have a written binding agreement? (Assuming that question will be asked…)

Assume I agree with you that what the IRS is requesting is not allowed in CA and therefore inherently not fair to CA residents. Maybe that violates an equal tax for all clause too. Maybe there are tax lawyers who want to fight it out with the IRS, but at the end of the day what we in CA need to determine is can we check that box when prompted.