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BMW i3 Rex is Indeed Tax Exempt in New Jersey

BMW i | July 19th, 2014 by 4
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In a surprising turn of events, the New Jersey Department of Environmental Protection (NJDEP) reversed a previous decision to exclude the BMW i3 REx from …

In a surprising turn of events, the New Jersey Department of Environmental Protection (NJDEP) reversed a previous decision to exclude the BMW i3 REx from the States Tax exemption for zero emission vehicles. This hopefully ends the nearly six month saga from the time it was originally thought the range extended version would indeed qualify, to the announcement shortly after the launch that it would not.

I actually found out a few days after I bought my car that it would not qualify, and I would have to pay $3,921.00 in sales tax. This was totally unexpected and would have actually made the range extender nearly an $8,000 option for me!
BMW i3 Rex is Indeed Tax Exempt in New Jersey

As much as I love having it, I wouldn’t have agreed to pay that much for it had I known the effective cost would be so high. For $3,875 I think it’s fairly priced. But $7,800? No way! I even dedicated a blog post to this issue back in May when the surprising (bad) news was announced. I will say never actually ended up paying it all though. That’s because my dealership, JMK BMW realized this was a BMW communication error and not the customers fault. They decided they couldn’t go back and charge customers so much more than they had signed contracts for and they honorably worked out a deal which made everybody happy and nobody cancelled their order. My client adviser, Manny Antunes sold eleven i3s with range extenders so this wasn’t an easy decision but the dealership decided it was better to keep the customers happy than to call them all up and tell them they now owed nearly $4,000 more for sales tax.

READ ALSO: BMW i3 REx Likes/Dislikes

However that wasn’t the case with other dealerships, and I know people that bought REx cars and had indeed paid the every penny of the sales tax and didn’t get any other dealership rebate or credit. They will be very happy when they open the mailbox one day soon and find a nice check in there because this decision is retroactive to May 1st, which is before any i3’s were sold in the US. I was actually the first i3 REx delivery in the US, and that took place on May 21st so all i3 REx cars sold in NJ will indeed qualify for the ZEV tax exemption.

The NJDEP Zero Emission Tax Exemption list has already been updated to include the i3 REx and can be viewed here. Let’s just hope this is the ends the “It’s tax exempt…no it’s not” saga we’ve had here in the Garden State.

[Source: bmwi3blogspot]

  • CDspeed

    That’s sad actually, a car with a gasoline engine getting a tax exemption intended for zero emission vehicles. And you used the tax exemption in your mind to justify buying a gasoline option. So I’m sure other people will now look at the exemption as a way of writing off the Rex, so instead of encouraging the purchase of zero emission vehicles, as far as the i3 is concerned in New Jersey, it will encourage the purchase of a gasoline engine. I know, the Rex is intended for occasional use, and will be used that way, but it means the i3 Rex is not zero emissions, so the original intent of the exemption has failed. I get almost nothing from my state, there is an exemption from certain surcharges on car insurance, so I might get a small discount on my car insurance. And though I will get the federal tax credit, but if for some reason I didn’t get it, it doesn’t matter, I fully expected to pay for the entire purchase price, just like I have with all my cars.

  • JRobUSC

    I wonder if the dealership will get reimbursed for the sales tax, then, since they still had to collect it, even if they absorbed it somehow. Legally speaking it still had to be shown on the contract as collected and paid, which means you yourself might be getting a $4000 check back for the taxes they actually paid on your behalf. If that happens are you going to be bringing them that check, since they’re the ones who paid it?

    • Tommolog

      You are likely correct. The dealer didn’t actually pay the sales tax, they cannot legally do that. The customers did but some dealers were able to get creative to make sure the customers were happy and felt the dealer did the right thing by them. JMK BMW in Springfield, NJ did indeed make a great effort to make sure the customers were satisfied with the outcome, but they couldn’t legally pay the sales tax themselves.

      There is probably only 20 or 30 REx i3s already delivered in the State so yes, there will be some kind of maneuvering after the fact to now correct the issue and make everybody whole.

      • JRobUSC

        If the cars weren’t tax exempt at the time, then taxes were paid. If you didn’t pay the extra amount, then they deducted it from the money they collected on the sale of the car and paid it for you. To illustrate, if you originally agreed to, say, $50k when you ordered your REx, and suddenly it was $54k because of the unexpected taxes, but you still only paid $50k, then they backed out the sales tax from $50k and really sold the car for $46.3k + tax, which would be $50k total. So, you “paid” the taxes officially, but really, the dealer did, because they backed down the price they originally agreed to in order to fit them under it. You are right — that is a very great effort on the part of the dealer to keep their preorders happy. That’s why I was wondering what you’d do with the refund check if you got it, since in order to keep you from paying more than you originally agreed to the dealer is the one who is out that money.

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