Virginia EV Tax Credits Guide

The state of Virginia supports a variety of environmentally-friendly initiatives and policies. These include rebates, incentives and tax credits to help residents and businesses more easily and affordably transition to cleaner energy sources.

Virginia is considered a “CARB” state. These states, which are growing in number, choose to follow clean air guidelines from the California Air Resources Board, rather than the U.S. federal government’s guidelines.

Incentives change over time, so be sure to consult a tax professional before buying or leasing an electric car or other related products. Virginia’s incentives were current at the time of publishing.

Yes, Virginia offers a credit of $2,500 to be used for the purchase of a new electric vehicle from a participating dealer. Qualified residents may be able to get an additional $2,000 enhanced rebate. Qualified residents must have an annual household income that doesn’t exceed 300 percent of the current poverty guidelines.

In order for an electric vehicle to qualify for the credit, it must be powered solely by electricity and have a maximum base price of $55,000.

The credits are available on a first-come, first-served basis until funding is no longer available for the year.

Yes, the above rebate also applies to used electric vehicles, with the same dollar amounts. The used EV must be between two and seven years old, with a sale price that cannot exceed $25,000. It must be sold by a participating dealer.

No, there isn’t a charging station credit or related incentive that’s officially sponsored by the state of Virginia. However, there are multiple programs available through many utilities, and Virginia goes so far as to encourage its utilities and local businesses to assist with such programs.

A few examples include a $125 rebate from Dominion Energy for the purchase of a Level 2 EV charging station and a similar $200 rebate from Danville Utilities.

Some localities in Virginia offer either full or partial exemptions from local property taxes. In short, when you add a solar system, your property value may rise, which will result in increased taxes. However, those additional taxes may be waived depending on where you live in the state.

Virginia also pays residents for the production of clean energy via Solar Renewable Energy Certificates (SRECs). Residents can then sell those credits to earn additional income.

The Residential Clean Energy Credit is a U.S. federal tax credit that aims to increase residential solar energy adoption. It covers up to 30 percent of the costs associated with solar installations. The credit includes labor and equipment and can even be used to help offset the cost of electric service and panel upgrades, home energy storage batteries and EV charging stations that are installed along with the solar system.

Yes, electric car owners are required to pay a yearly highway fee on top of the standard vehicle registration fees. The use fee is 85 percent of the amount of taxes paid on the fuel used by a vehicle with an EPA fuel economy rating of 23.7 mpg combined. The tax is determined based on the average number of miles traveled by passenger vehicles in Virginia and is currently $116.49, though the figure will fluctuate.

As an alternative, residents can opt to enroll in a program that bills them based on their mileage rather than paying the pre-established highway use fee.

Virginia residents who buy an EV may qualify for a U.S. Federal Electric Car Tax Credit of up to $7,500. The program offers a credit of up to $4,000 for qualifying pre-owned EVs. Several utility companies and other related companies in the state also offer incentives for installing residential charging stations and enrolling in time-of-use (TOU) rates.

Virginia provides a number of other related opportunities for EV buyers. Check with your local government offices, automotive dealers and utility companies to learn more.