Golf carts popularity soaring

November 6, 2009 9:07:30 PM PST
You may not have noticed, but there's been a run on golf carts lately. The deep discounts are all courtesy of the U.S. government. People are snatching them up to get a tax break, but tax experts say it's nothing but an exploitation of the system. Mark Douglas and his wife just bought a new electric golf cart, and thanks to the IRS, they'll get about 60 percent off. But when they first heard about a federal tax credit on electric golf cars, they weren't buying it.

"Unbelievable, it just didn't sound right," said Mark.

Mark's wife, Lynn Douglas, said, "Absolutely, too good to be true, no such thing. I went straight to the internet as soon as we got home."

She went to the IRS website and found a section on low-speed vehicles, showing some golf carts do in fact qualify. But just like the Douglas' heard about the tax credit, so have countless others.

"It's gone through the roof. It's been unbelievable. The phones haven't stopped ringing," said Derek Severns, co-owner of Golf Carts of Houston.

Severns has seen his business double, if not triple. The golf cars that qualify are street legal, complete with turn signals, seatbelts, a windshield and brake lights.

So theoretically if you take the plunge on this one that retails about $8,300, then after a $5,300 tax credit at the end of the year, you could be cruising down the road for $3,000.

"It's Department of Transportation certified in the State of Texas, these vehicles are. They can register it and should register it, just like their vehicle, and allows them to drive under the same rules of the road on any road of a posted speed limit of 35 miles an hour or less," said Severns.

But some IRS experts say put the brakes on for a second. The law was actually meant for bona fide electric vehicles like these sold at Houston Electric Cars.

"Congress's intent was for high-mileage, efficient road vehicles. These do not appear to fit that definition, so it appears there is some abuse here," said Bob Martin, certified public accountant.

Either way the only abuse the Douglas' are planning on is to their new electric golf cart. It's now going to be the errand vehicle.

"We are right next door to brand new Kroger Marketplace. Our subdivision is right next door. We are across the street from an elementary school. A lot of parents can deliver their kids and pick them up from school with an electric car. No starting up the big car," said Lynn.

Martin said in order to protect yourself, request a copy of the certification letter from the manufacturer which shows they have given the data to the government and that it does qualify for the credit.

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