When they hear there’s a tax credit for golf carts, most people shake their heads in disbelief. But it’s true. It’s called Code Section30D of the Internal Revenue Service, proposed by the Obama Administration and approved as part of the American Recovery and Reinvestment Act of 2009. 

The $2,500 tax credit applies to so-called Qualified Plug-in Electric Drive Motor Vehicles – any vehicle that draws its energy from a battery with at least 5 kilowatt hours of capacity including two- and three-wheeled vehicles such as golf carts. A further $419 credit applies for each kilowatt of power over that, up to a maximum of $7,500.  

The IRS further ruled that golf carts qualifying for the credit must be new not used and must be road ready; in other words, they must be equipped with certain safety features such as rear view mirrors and seatbelts. 

The tax credit does have a sunset rule, so to speak. It applies only to the first 200,000 vehicles sold by a single manufacturer and then phases out during the following year. Carts sold in the first and second post quarters can receive 50 percent of the credit, and carts sold in the third and fourth quarters can receive 25 percent of the credit. After that, there is no credit available.  

While the golf cart credit has been criticized and even ridiculed by some, it nonetheless has fueled sales of golf carts. In some communities, particularly southern cities and retirement neighborhoods, golf cart sales have skyrocketed, with some buyers viewing the tax credit as a way to get a big discount on something they’ve been wanting to buy for awhile.