Companies that operate electric vehicle charging stations in the city of Los Angeles could get a tax break soon.
The Los Angeles City Council voted to move forward with an initiative spearheaded by Councilmember Paul Koretz to lower the gross receipts tax for electric vehicle charging companies to $1.27 per $1,000 of revenue, down from $4.25 per $1,000.
The City Council action requested that the city attorney draft an ordinance that will create a unique classification for electric vehicle charging transactions and level the amount that these companies pay.
“It is ridiculous that we are gouging EV charging companies, who are paying nearly three times that of gas stations on some of their revenue,” Koretz said. “If we are really serious about incentivizing the use of electric vehicles and building out the necessary charging infrastructure, and encouraging EV charging companies to come to L.A. and stay in L.A., then this is a crucial piece of that puzzle.”
The city’s gross receipts tax has long been criticized by many in the business community as expensive and assessed regardless of a company’s profitability. Therefore, any reduction of the tax is often hailed as a victory.
Currently, EV charging companies are paying two different gross receipts tax rates: $1.27 for every $1,000 of revenue for one-off purchases at a charging station, and $4.25 for every $1,000 when a customer purchases electricity as part of a package they bought or were given when their vehicle was purchased. This is because the electricity purchased as part of a contract or membership is categorized under a different part of the city’s code.
“The climate crisis demands that we do everything in our power to incentivize the use of electric vehicles,” said Councilmember Kevin de Leon, who seconded the motion. “The system now does the opposite by giving gas stations an economic advantage over EV charging stations.”
