Sales of plug-in cars are on the up, despite falling oil prices.

BMW i3 REx Tax Exempt After All in New Jersey, Rebates Being Mailed Out

Depending on where you live in the U.S., buying an electric car can mean that you can benefit from any number of incentives designed to make buying an electric car cheaper. In the state of New Jersey for example, a 100 per cent electric car is exempt from the state’s usual automotive sales tax.

After not being so, the BMW i3 REx is now officially exempt from sales tax in New Jersey.

After not being so, the BMW i3 REx is now officially exempt from sales tax in New Jersey.

When it comes to plug-in hybrids and range extended cars however, New Jersey’s sales tax incentives have been a little more confusing. Take the BMW i3 REx for example. Despite being told earlier this year that the BMW i3 REx would be exempt from sales tax, we told you back in May that no, the i3 REx would attract sales tax in the Garden State, because its small on-board gasoline-powered range-extending engine technically made the car a plug-in hybrid, a class not exempt from sales tax.

But a last-minute change in sales tax regulations last week from the New Jersey Department of Environmental Regulation (NJDEP) means the BMW i3 REx will, after all, be sales tax exempt after all.

With many BMW i3 REx customers taking delivery of their cars before the NJDEP changed its mind on the sales tax due on the car, it appears many early-adopting i3 REx owners have paid sales tax, while others have been given a rebate or discount to ensure they haven’t.

The question of sales tax arose before the BMW i3 REx even arrived in dealerships, with BMW claiming that their customers did not need to pay the sales tax. Because it was still required by law however, some customers who picked up their cars before the NJHEP’s change of heart found dealerships were adding sales tax on top of their car’s sticker price.

In other cases, attentive dealerships offered customers a discount or rebate on their vehicle equivalent to the unexpected tax they would have to pay.

2014 BMW All-Electric i3 Press Drive.

The BMW i3 REx is now exempt from sales tax in New Jersey, but some owners have already paid it.

We reached out to Electric car enthusiasts Tom Moloughney and Krishnamurty Kambhampati for their thoughts about the situation. Having both already picked up their BMW i3 REx cars before the change of heart over sales tax, both had to technically pay sales tax — but the effective price they paid was different.

“Yes, I did pay the sales tax,” said EV advocate and former BMW Mini E and ActiveE driver Tom Moloughney. But while he paid $3,921 in sales tax, his local dealership — JMK BMW — offered him appropriate discounts on his car equivalent to the tax bill he was facing, effectively cancelling out the extra cost added by the unexpected sales tax.

“Some dealers realized they needed to do something along the lines of a credit or discount of some amount because they had signed contracts which indicated the car was tax exempt, and they didn’t want the customers to walk away from the deal when they found out the terms have changed,” he said. “I’m very happy with how JMK BMW handled the situation.”

According to Moloughney, a total of eleven customers at JMK BMW ended up with an unexpected tax bill. Seeing that the true taxation problem stemmed from a BMW miscommunication however, his particular dealership dealt with each of the eleven customers accordingly.

The story isn’t the same at other dealerships however. Business entrepreneur and EV owner Krishnamurty Kambhampati — who also participated in BMW’s test fleet ActiveE ‘electronaut’ program — gave us another perspective on the issue from his experience buying the REx. From the start, he was told by his dealer that sales tax was going to be included. There was no situation in which the tax was added on later or not spoken about, and he had to pay the tax in full.

The switch is the latest in a long line of confusions over which taxation class the i3 REx fits into

The switch is the latest in a long line of confusions over which taxation class the i3 REx fits into

Kambhampati admitted that sales tax made the initial price of the REx go up more than he liked, but he was committed enough to owning the car that he decided to make the purchase anyway. He told us that the steeper price would be a much tougher situation for the average buyer, who could easily be turned away by high prices if they were not committed to specifically buying the REx.

Luckily for Kamblampati and other early-adopters who did pay the full sales tax on their cars, the state of New Jersey is now about to send out rebate cheques, since the NJDEP decision to reverse the i3 REx’s taxation status is retrospectively applied to May 1, well before a single i3 REx was delivered in the U.S.

From now on, if you’re buying a BMW i3 REx in the state of New Jersey, the sales tax exemption of this important plug-in will make the car more palatable to the average consumer. For anyone who already views the BMW i3 REx as having a steep sticker price, that’s a welcome thing.


Want to keep up with the latest news in the world of evolving transport? Don’t forget to follow Transport Evolved  on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.


Want to keep up with the latest news in evolving transport? Don’t forget to follow Transport Evolved on Twitter, like us on Facebook and G+, and subscribe to our YouTube channel.

You can also support us directly as a monthly supporting member by visiting

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInDigg thisShare on RedditEmail this to someonePin on Pinterest

Related News

  • CDspeed

    I still feel the i3 REx getting a tax exemption that was supposed to be an incentive to encourage the purchase of zero emissions vehicles, is wrong. Especially if people use the tax exemption to write off the cost of the REx, so instead of being a zero emissions incentive, it will encourage the purchase of a gasoline engine. And sadly I seem to be alone in this concern, as people only seem concerned about getting the discount. Ok, a few were promised it, and it’s those people that should get it because it was quoted to them in their deal with their dealers. But a gasoline burning car shouldn’t be added to a zero emissions tax exemption. ( And I don’t need another reminder that the REx is for occasional use, and will be use as such)

    • Michael Thwaite

      You know, I think that the REX is the EV antithesis of the plug in prius. One’s really a gas car with a tiny weeny battery and the other is an EV with a tiny weeny gas engine.nnnSo, don’t get me wrong – I heart my i3 Bev and I _will_ push it to zero miles remaining… or push it when it goes over zero miles remaining but still, I think NJ will probably get their monies worth out of the sales tax exemption from all the REX owners that might pluck up the courage to take the 80 mile trip in the i3 instead of wimping out and taking the truck instead.nnnI’m EV through and through and I’ll throw rocks at anyone that proudly sings about their road-trip in an i3 REX instead of taking the train/bicycle/Prius (face-palm) but, yeah, I’ve come to terms with the notion that the good of the many outweighs the needs of the few… For now.nnnThat i3 big-battery 120mile model and/or CCS chargers aplenty renders this all moot.

  • D. Harrower

    My my, but is New Jersey fond of last-minute legislative reversals.nnnLet’s ban Tesla sales at the last minute, but we’ll also do an about-face to AVOID getting taxes from BMW? These guys have a strange definition of supporting American business.nnnDo they believe Elon Musk really IS from Mars or something? After all, if the president is from Kenya…

Content Copyright (c) 2016 Transport Evolved LLC