Wednesday, 15 June 2022 10:40

California Could Soon Incentivize 'Car-Free Life' Through Tax Credits


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California lawmakers could soon offer tax credits to households with fewer cars than people of driving age under a new proposal.

Senate Bill 457, introduced by Sen. Anthony Portantino, D-La Cañada Flintridge, would allow for a tax credit of $2,500 for each household member of at least 16 years of age that exceeds the number of registered vehicles, capped at $7,500. The bill would take effect on Jan. 1, 2023, if signed into law.

California lawmakers aim to address the impacts of climate change in the Golden State with such bills. Lawmakers have pointed to transportation’s impact on the climate, which accounted for 41% of California’s greenhouse gas emissions in 2019, according to data from the California Air Resources Board.


California already offers incentives for residents to switch from gas cars to electric vehicles, but Portantino’s bill would incentivize moving away from vehicle dependence altogether. Instead, the bill would incentivize people to choose more sustainable transportation options – like mass transit – to slash greenhouse gas emissions.

“What we’re really trying to do here is incentivize car-free life,” Portantino told The Center Square. “This is tied to incentivize the use of mass transit and create a way for people to have a monetary reason to give up their car, just like they have a monetary reason to go from gas to electric.”

The bill specifies that a qualified vehicle includes a “device by which a person or property may be propelled, moved or drawn upon a highway,” excluding devices “moved exclusively by human power” or on stationary tracks. The bill also notes that an electric bicycle does not qualify as a vehicle.

A fiscal analysis from the Franchise Tax Board estimates the bill would result in General Fund losses of $0.7 billion in fiscal year 2022, followed by losses of $1.2 billion in the coming fiscal years.

A committee analysis of the bill pointed out that it “could favor high-income earners who have the ability to telework, live in walkable neighborhoods and live in desirable communities...

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