A bipartisan group of 31 members of Congress has submitted a letter to the U.S. Department of the Treasury, urging clarification of the Commercial Clean Vehicle Credit under the Inflation Reduction Act (IRA) of 2022. The letter requests Treasury issue guidance to confirm that off-road mobile machinery—such as electric bulldozers, excavators, sprayers, and forklifts—qualifies for the tax credit.
The IRA’s 45W tax credit, which offers up to $40,000 for qualifying vehicles, was designed to incentivize businesses to purchase clean, electric vehicles. However, the IRS has recently applied an outdated definition of "mobile machinery" that excludes off-road equipment from the credit. Industry leaders, including the North American Equipment Dealers Association (NAEDA), the Outdoor Power Equipment Institute (OPEI), and the Association of Equipment Manufacturers (AEM), have been working with Congress and Treasury to address this issue.
“Congress was clear in the IRA that the 45W tax credit for qualified commercial clean vehicles explicitly includes off-road vehicles,” said the letter addressed to Secretary of the Treasury, Janet Yellen. It is our concern that the IRS’s restrictive interpretation goes against the law’s intent and could slow the transition to cleaner, more sustainable machinery.
The off-road mobile machinery sector supports 2.3 million U.S. jobs and is increasingly adopting battery-electric technologies to reduce emissions. Access to the 45W credit is essential to make these vehicles competitive with traditional, fossil-fuel-powered machinery.
The letter from Congress urges Treasury to interpret the law as intended, ensuring that all eligible off-road vehicles can benefit from the tax credit. Industry groups are hopeful that Treasury will soon issue the necessary guidance to clarify the credit’s applicability.
For more information, please contact Sr. VP of Government Affairs Eric Wareham, North American Equipment Dealers Association at ewareham@naeda.com.
