Rep. Cutrona’s bill setting tax exemptions for electric vehicle parts easily passes House

COLUMBUS — Voltage Valley anchors like Lordstown Motors Corp. and Ultium Cells LLC can benefit from new sales tax exemptions given overwhelming approval this week in the Ohio House.

Ohio House Bill 292 — sponsored by state Reps. Al Cutrona of Canfield, R-59th, and Lisa Sobecki of Toledo, D-45th, and passed in the House on Thursday by an 81 to 10 vote — would create a temporary sales tax exemption for parts used to make electric vehicles. That would include engines, transmissions, batteries and brakes, and the exemptions would expire at the end of 2026, according to a Legislative Service Commission analysis.

Taiwanese electronics manufacturer Foxconn, formally Hon Hai Technology Group — which will soon own the former General Motors auto plant in Lordstown — and Lordstown Motors Corp. are expected to begin commercial production of the all-electric Endurance pickup truck in the second half of 2022. Lordstown Motors Corp. is expected to manufacture the vehicle's hub motors and battery packs, which would presumably be considered electric vehicle components under the new bill.

The neighboring Ultium Cells LLC facility in Lordstown also is manufacturing batteries for General Motors' upcoming lineup of electric vehicles.

Cutrona told Mahoning Matters on Friday that the legislation wasn't developed with one specific electric vehicle manufacturer in mind. He said other states have enacted such exemptions on electric vehicle components and his bill is intended to help Ohio stay competitive.

"It shows … Ohio is here, we have the laborers, we want to continue to keep our laborers, we want to continue to be competitive amongst other states," he said. "I can't tell you how many folks [after its introduction] reached out — businesses that are interested in Ohio if this legislation gets passed."

The commission noted, however, that most of the tax exemptions included in Ohio House Bill 292 already exist under Ohio law — specifically, exemptions on tangible personal property for sale through manufacturing, assembling, processing or refining, and on components used to manufacture tangible personal property to be sold.

"Thus, it appears a significant number of tangible property exempted by the bill may already be exempted under codified law," the commission wrote. "The extent to which the bill may expand the existing manufacturing exemptions is unclear, so the bill may result in fiscal losses, though any sales tax revenue decreases may be small."

The bill also would create a new state-level commission on electric vehicles, to study the industry and make policy recommendations. The commission's 10 members would include four bipartisan state lawmakers, two from each chamber, and six governor appointees who represent the state's local governments, the automotive industry and its labor unions, electric vehicle charging station manufacturers, and representatives from the Ohio Automobile Dealers Association and Clean Fuels Ohio.

"We've really made a very inclusive list of folks," Cutrona told Mahoning Matters. "I've spoken to so many different car manufacturers, car dealers who see the trend of electric vehicles moving forward. I don't want Ohio to be left behind."

The bill now moves on to the Ohio Senate.

This story was originally published November 20, 2021 at 5:00 AM with the headline "Rep. Cutrona’s bill setting tax exemptions for electric vehicle parts easily passes House."