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Wondering if it's possible to get one of the swanky new Extended Range PHEVs via OSD and taking a European road trip, but still get the US tax credit upon taking delivery at home?
 

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2022 Volvo XC90 T8 Extended Range, 2022 AWD Polestar 2
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Yes it is possible if you end up mainly operating it in the US. Depending on the rules in your state you may also be able to claim a state EV credit. For example in Texas you have to do an OSD order through an instate dealer during the time credit is available.
 
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You're actually buying it from your local dealer, so for this purpose it's the same as buying one off the lot.
Another wonderful thing about Volvo's OSD program.
 

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Actually I think that you are buying it directly from Volvo with the dealers assistance and not from the dealer. This is one of the reasons why some dealers shy away from doing it. It’s a less profitable deal than selling you one of their cars.
 

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I highly recommend you read or better yet go through the motions of submitting a state EV credit (or equivalent) as every state is different.

Some states may even have time limits when you can submit a request for this EV credit which may not fit with when OSD paperwork is available.

Good luck reading ahead of your OSD purchase!
 

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You're actually buying it from your local dealer, so for this purpose it's the same as buying one off the lot.
Actually I think that you are buying it directly from Volvo with the dealers assistance and not from the dealer.
That's a technicality. When I paid for it prior to going to Sweden, I got a receipt from the dealer, and that's enough proof to qualify for the tax credit. Actually, all I had to do was put in the price and VIN on my tax return.
 

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I highly recommend you read or better yet go through the motions of submitting a state EV credit (or equivalent) as every state is different.

Some states may even have time limits when you can submit a request for this EV credit which may not fit with when OSD paperwork is available.

Good luck reading ahead of your OSD purchase!
This is great advice to read and understand your state's requirements. For Texas you need to purchase the car from an in-state dealer and they need to fill out part of the application. You can submit for the credit when the program has money, you have purchased the vehicle and applied for registration. Unlike the federal credit there is no language about having to wait to place the car in service. The dealer has to fill out their state dealer number and certification that the vehicle is an eligible plug in vehicle for the purpose of the state credit (that's why you have to buy the OSD car in-state from an instate dealer or I would have gone with Steingold). I thought all this was going to happen when my car arrived but actually I became a legal owner in March and that's when dealer applied for the registration and filled out the tax credit. This is significant because state of Texas ran out of money for our plug in credit on 5/31 so the fact that I paid for the car a few weeks early ended up working greatly to my advantage. Our state credit was doing great and moving at the normal snail pace but then the press started trying to stir trouble between Elon and the state since Tesla is the only brand not eligible. We went from only 300 applications on March 1st to 3000 applications on June 13 (only money for first 2000).
 

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i got my 750 california credit applied on the car 1 month before travel when i paid for the car. so california didnt care for actual delviery just the transaction.
I am guessing same for fed? but it's just that you do at tax filing time. It really is same as buying anything else at dealer in terms of paper work.
 

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You buy it from your local dealer, not direct from Volvo. Normally, when we're all discounting cars, OSD is better for dealers bottom line then a normal discounted price, even if the discounted price is higher. Volvo pays the dealership a commission for the deal, so profit wise it's still a good deal for dealerships.

The primary reasons dealers don't want to do it is it's more work, you don't get paid right away, and for sales folks, many of them won't be around in the industry long enough to get paid on it (same reasons many dealers don't like factory orders). Currently it's harder to do because you do make less money too, and it takes away a car you could sell for more without any problem.

For OP, yes, you absolutely get the federal tax credit. It's a new car, you sign the CO here in the states when you pick it up from the dealer.
 

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i got my 750 california credit applied on the car 1 month before travel when i paid for the car. so california didnt care for actual delviery just the transaction.
I am guessing same for fed? but it's just that you do at tax filing time. It really is same as buying anything else at dealer in terms of paper work.
For federal tax credit, you definitely need to place it in service and that date matters. There were some well known cases back in 2009-2010 when NEVs stopped being eligible for the $7500 tax credit. There was a company that was selling cars, making you pay for it and register the car and then they shipped them 6-7 months afterwards. Everyone's credit was disallowed and there were couple of revenue rulings as a result of that case. I forgot the name of the automaker. For OSD you could make an argument that you have placed the car in service when you pick it up in Europe but I am glad I have a straight forward situation with mine and don't have to think about it.
 
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For federal tax credit, you definitely need to place it in service and that date matters. There were some well known cases back in 2009-2010 when NEVs stopped being eligible for the $7500 tax credit. There was a company that was selling cars, making you pay for it and register the car and then they shipped them 6-7 months afterwards. Everyone's credit was disallowed and there were couple of revenue rulings as a result of that case. I forgot the name of the automaker. For OSD you could make an argument that you have placed the car in service when you pick it up in Europe but I am glad I have a straight forward situation with mine and don't have to think about it.
I found one of the cases. Taxpayers purchased the vehicle and even added insurance on it prior to end of 2009. They were not required to register a low speed vehicle in their state but it wouldn't have mattered even if they did. Starting in 2010 NEVs no longer qualified for the federal EV credit. Despite being legal owners of the vehicle and paying for insurance, IRS and the court eventually ruled that vehicle was not placed in service until much later. My best guess with OSD is that IRS would argue that date you place it in service is when it arrives here in the US and you start using it. They would likely not consider OSD delivery date as the car actually being in service for it's intended use.

Practically speaking, if you send in the right documentation when requested in a correspondence audit nobody might go into this level of detail. If you pay for your car in December and get it in January the conservative approach would be to claim it in the new year and aggressive approach would be to claim it for the old year. I'm just glad I'm not in that situation and my case is clear cut.

One of the laws that was being proposed was the Build Back Better. It would have reduced the credit for plug in hybrids. I'm glad it did not pass while I was waiting on my vehicle.

 
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It’s a long shot , but for any Virginians out there —
My preliminary research suggests that you only qualify for Virginia state tax credit if electricity is the “ sole means of propulsion”, Meaning you have to have a pure EV and not a hybrid to qualify. We wouldn’t qualify with a T8 recharge extended range.If somebody thinks otherwise I wouldn’t want to miss out on a state tax credit.
 

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It’s a long shot , but for any Virginians out there —
My preliminary research suggests that you only qualify for Virginia state tax credit if electricity is the “ sole means of propulsion”, Meaning you have to have a pure EV and not a hybrid to qualify. We wouldn’t qualify with a T8 recharge extended range.If somebody thinks otherwise I wouldn’t want to miss out on a state tax credit.
Assume the Volvo is not unique in offering a drive mode (Pure) that can be the "sole means of propulsion." Might be instructive to see how those others have been viewed by the taxing authorities in Virginia. One could at least argue that the rules were directed at models such as the Prius or hybrid Sienna that do not offer that option. (Would the E version of the RAV4 be such a vehicle that can operate with electricity as the sole means of propulsion despite having an ICE engine?)
 

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It’s a long shot , but for any Virginians out there —
My preliminary research suggests that you only qualify for Virginia state tax credit if electricity is the “ sole means of propulsion”, Meaning you have to have a pure EV and not a hybrid to qualify. We wouldn’t qualify with a T8 recharge extended range.If somebody thinks otherwise I wouldn’t want to miss out on a state tax credit.
I've gone down a rabbit hole with the Virginia state tax credit of $2,500 myself. Long story short, it's not real. The whole program was never funded so there's no money to pay any EV owners. This is likely the case long term, so I wouldn't expect anything from the state in terms of any credits.

However, if it were going to happen you'd need to purchase from a "participating dealer." So any purchase would need to be from a Virginia dealer, but OSD would still qualify since you go through a dealer. Also, the T8 recharge would count based on the wording in the program. But it doesn't really matter since it's not funded. :)
 
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