When Roger Gaddis heard about the 50 percent tax credit the state of Oklahoma offered to people who purchase electric cars, he literally couldn't believe it. He called the Oklahoma Tax Commission to make sure the credit actually existed and was told it did. But that wasn't enough for him.
"I still was somewhat in disbelief," Gaddis said. "I assumed that I would have customers, even, who would have trouble believing that, so I asked them if they would put that in writing."
Once he had a letter in hand that confirmed the credit's existence, he opened a business selling low-speed electric cars, some of which look like golf carts.
His dealership, Ada Electric Cars, went into operation in 2008, and everything was going fine until mid-September, when the tax commission enacted an emergency rule saying electric cars that resemble golf carts or are meant to be used for primarily recreational purposes would not qualify for the half-off credit.
That rule created confusion in the electric car market as to which vehicles would qualify and which wouldn't, and because of the confusion, many people became hesitant to purchase an electric car. Gaddis said that confusion and hesitation caused his sales to drop tremendously.
Paula Ross, a spokeswoman for the commission, said the rule aimed to clarify the law, which has been on the books and available to Oklahomans since 1996. It was not, however, widely used until the last few months, after the federal government also began offering a relatively substantial credit to people who buy electric cars.
Gaddis said the two available credits amount to a deal many Oklahomans could not pass up.
"Those two credits added together covered the majority of the cost, and in some cases, the entire cost of the vehicles," he said. "Well, obviously as taxpayers found out that they could move into an energy-efficient, environmentally friendly vehicle at a small investment, and in some cases even for free, the incentive "¦ that both the federal and state governments put in place became so overwhelmingly attractive that buyers across Oklahoma started flooding the dealerships."
Ross said the continually advancing technology in the electric car industry also contributed to an elevated interest from consumers. Due to this increase, she said, the commission enacted the emergency rule.
"The last year, we'd had a lot more questions and people calling and e-mailing, so they tried to clarify the law," she said. "In other words, we obviously have to administer the law. We can't change the law, but we do (have) rules trying to clarify how we are administering the law.
The rule, however, did anything but clarify the law, and after Gaddis filed a lawsuit against the commission, it was retracted.
"Well, what happened is the commission did a rule trying to clarify the law, and they realized after they did that, that actually, it wasn't serving that purpose," Ross said.
Although the rule was stricken, Ada Electric Cars moved forward with its lawsuit, because confusion as to which cars qualified for the credit remained, dramatically affecting the dealership's sales.
On Oct. 9, the commission posted on its Web site a list of vehicles that qualify for the credit, as well as those that don't. Gaddis' models were among those that were not approved, which he said made him feel "cheated" and "violated."
He said his cars have similar "mechanical configurations, the same safety considerations and the same speed capabilities" as some of the other electric cars the commission deemed credit-eligible.
In the weeks following the posting, Gaddis' legal action grew, turning into a class-action lawsuit when other electric car dealers around the state joined the fight. It finally came to a head in late October, said Bob Bennie, the co-owner of Ada Electric Cars. On Oct. 21 in a Garfield County court, Bennie said, the dealership's lawyers and the commission's lawyers negotiated an unofficial settlement to get the dealership to drop the damages suit it had against the tax commissioners.
"Their offer to us was "¦ they would allow us to sell all those cars " us and the other five dealers in the lawsuit " to sell all of our inventory and our customers to get their state income tax credits if we would drop the damages case against the commissioners," he said. "And we all agreed to it, and then they told us, 'Well, now we can't get this in writing until the next tax commission meeting, which is Oct. 27.'" But during that meeting, the commission reneged on the deal, Bennie said. This, however, ended up not mattering.
"First thing in the morning, Wednesday the 28th, the judge came out with his ruling "¦ and we won everything. He said that all of our vehicles or any vehicles that were similar to them were approved for the tax credit, and then he said that tax commission is enjoined from denying the credits to any Oklahoma taxpayers or from further commenting on the matter," Bennie said.
The ruling meant that cars that qualified for the credit prior to the September emergency rule would qualify for it again. This would seem to indicate an end to the confusion, but the story doesn't end there.
Due to the ruling, the commission removed the list of credit-eligible vehicles from its Web site, Ross said, although by press time, it was back again. Also, because of the court order, she said she was unable to say too much regarding the case.
On Dec. 2, a representative of the company Gaddis & Gaddis Wealth Management published a press release that stated the 30-day limit had come and gone for the commission to appeal the ruling in the case.
Ross, however, said the commission released its own statement to answer that release. Part of that statement reads, "We can say that we do not agree with the opinions or conclusions expressed in the press release. In the opinion of the Oklahoma Tax Commission's counsel, the subject litigation is not concluded. Further comment is not appropriate in view of ongoing litigation and pending injunctive orders."
Therefore, the confusion lingers, despite a court ruling. Bennie said his company's cars qualify under the law that took effect 13 years ago, and sales have picked back up, although they're not all the way back to the level they were at before September's emergency rule.