Attn Mike Sims.doc

					                 STAR EV- LSV Tax Credit 2010 Update
Dear Valued Customer,
Thank you for your support of the STAR brand and your contribution in helping us to achieve a
record year in 2009!
 Many of you have been asking for a status update on the Tax Credit for Low Speed Vehicles
(LSV) in 2010. Here it is:

2010 Low Speed Vehicle Tax Credit Update:

Many in the industry are wondering if the LSV tax credit will be repeated in 2010. The answer is
"no"...not as it was approved in 2009. However, the American Recovery and Reinvestment Act
of 2009 (ARRA) will include a tax credit for LSV's in 2010.
 The Emergency Economic Stabilization Act of 2008 (EESA) which passed during the Bush
administration included LSV's as new qualified plug-in electric drive motor vehicles. LSV's enjoy
the same amount of tax credit as total enclosed, highway ready electric vehicles like the GM
Volt, Nissan Leaf, etc. As you'll recall, the EESA tax credit was calculated as $2500 plus $417 for
additional kilowatt hour battery capacity in excess of 4 kilowatt hours. The detail of this tax
credit is published in IRS Notice 2009-54, and the $5335 tax credit for most of the qualified Star
Electric Vehicles was certified based on this notice.
 While the huge amount offered in the EESA tax credit is gone, the ARRA tax credit will provide
consumers buying qualified Low Speed Vehicles (LSV's) with a 10% tax credit off of the purchase
price, up to $2,500.

Further Clarification:

Although the EESA tax credit remains in place for 2010 and beyond, IRS Notice 2009-89 states
that the new plug-in electric drive motor vehicle credit excludes LSV's.
 The difference is in the definition of "motor vehicle". EESA says the new plug-in electric drive
motor vehicle credit is for motor vehicle's as defined by IRS code 30 (C) 2 which states "any
vehicle which is manufactured primarily for use on public streets, roads, and highways and
which has at least 4 wheels". The new plug-in electric drive motor vehicle credit is for motor
vehicles as defined by Title II of the Clean Air Act which does not treat LSV's as "Motor
Vehicles".
 The ARRA includes LSV's as a Qualified Plug-in Electric Vehicle (not Electric Drive Motor Vehicle),
therefore, IRS code section 30 allows credit for 10% of the cost for LSV's, not exceeding $2500,
as published by IRS Notice 2009-58.
 Manufacturers of LSV's have to submit all the required materials to the IRS in order to qualify
for the 10% ARRA tax credit. Star Electric Vehicles is actively preparing all the documents and
will submit to the IRS shortly.
Many states and cities have introduced tax incentives on electric vehicles including LSV's. Check
out: http://www.pluginamerica.org/ for the latest tax credits by state.


What is there to do?

We urge all our dealers to write to your representatives in an attempt to push Congress to add
LSV's back to the EESA Tax Credit. We have attached a template to help make the process
simple...please feel free to use the attached letter as a starter or use the letter as is. Simply add
you local representative’s address.
 Please go to http://www.senate.gov/general/contact_information/senators_cfm.cfm to find
your senator's contact information.
 As we have all seen, the EESA tax credit has had a major, positive impact on all of our
businesses in the last quarter of 2009. The positive economic impact was broad and many
people were hired up and downstream in order to meet the huge increase in demand
(manufacturers of batteries, seat belt's, windshield's, seat kits and many more.)
 Our environment will also benefit with thousands of incremental "green", "zero emission"
vehicles being driven on roads throughout the U.S. The other "legal" reason for pushing
legislation to add LSV's back to the EESA tax credit, is that LSV's were put in the bill to begin
with. It was passed in October of 2008 during the Bush administration. However, the Obama's
administration did not release the IRS tax credit details until of end of July of 2009. Therefore
much of the budget allocated to LSV sales is left unspent, since consumers had less than 5
months to purchase an LSV before the bill was changed for 2010.

Just Imagine…

How big your business could be if the tax credit was in place all year. Let's all do our part to get
LSV's reinstated to the EESA bill!
Please call us if you have any questions or suggestions.

Thank you for your business!!

Sincerely,

Joe Wallington
VP, Sales and Marketing
Star Electric Vehicles
864-297-8833

				
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