Like every other middle-aged American man, I’m riddled with insecurities. To compensate for those fears that I’m not quite good enough, I’ve become overly competitive in all arenas of my life because, well…it’s cheaper than a sports car.
So a few summers ago, when I turned my mountain bike onto the long dirt climb that accesses the summit of the Buttermilk ski resort and spotted another rider a few hundred feet ahead, it was on.
I shifted up a few gears, increased my cadence, and expected to quickly reel in my target. But for the next 2,000 vertical feet, I gained no ground. Making it all the more maddening, while my legs and lungs were being pushed to capacity, the rider in front of me looked…effortless.
When I reached the summit, I pulled alongside the carrot I’d been chasing – a man at least a decade my senior – and admitted, “You made that look easy.” In turn, he pointed to his mountain bike and said, “It was easy.”
That was my first run-in with an electric bike, but it would be far from my last. “E-bikes” — bikes that look like like any other pedal bike, but are fitted with an integrated electric motor that takes the rider’s pedaling effort and converts it into a disproportionate amount of speed — have become ubiquitous around Aspen, Colorado. And while in my neck of the woods, e-mountain bikes are all the rage, in urban environments throughout the country, road and commuter versions have become extremely popular, allowing commuters to ditch their cars in favor of a mode of transportation that offers a lower price tag, zero emissions, and just enough of a mechanical boost to make the ride enjoyable.
MORE FOR YOU
For two Democratic Congressmen, however, the recent rise in e-bikes is not nearly enough, and they intend to incentivize even more people to trade four wheels for two by offering a few tax benefits for doing so. Jimmy Panetta (D-CA) and Earl Blumenauer (D-OR), both members of the House of Representatives, recently introduced the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act, which among other proposals, would provide purchasers of e-bikes an income tax credit equal to 30% of the cost of the bike, up to a maximum credit of $1,500. The goal, the two men stated, is to reduce carbon emissions, citing a recent study that found that if 15% of car trips were made with an e-bike, such emissions would drop by 12%.
Recent evidence would seem to indicate, however that people don’t need more motivation to splurge on an e-bike. Parker Yost, the head buyer for Basalt Bike & Ski, a bike retailer in Aspen, has had a first-hand look at the rise in e-bike popularity. “In 2017, we sold 39 e-bikes. In 2020, we sold 558. Between those same years, revenue from e-bike sales as a percentage of total bike sale revenue jumped from 6% to nearly 50%. That is unprecedented growth within a single category for our industry.”
Yost’s experience is not unique. In 2019, the U.S. imported 270,000 e-bikes; one year later, that number grew to over 600,000, and it still wasn’t enough to satisfy consumers. “The demand is unbelievable,” Yost explained. “As soon as an e-bike arrives at our store, a customer lays claim to it.”
Nevertheless, Panetta and Blumenauer are determined to further enhance demand in the form of a 30% tax credit. A credit – as opposed to a deduction – provides a dollar-for-dollar reduction in one’s tax bill. To illustrate, if you owed the IRS income tax before credits of $10,000, but during the year you purchased a $5,000 e-bike, you could reduce your bill to Uncle Sam by $1,500 – from $10,000 to $8,500 – by claiming the 30% credit up to its maximum of $1,500.
The credit would only apply to e-bikes with a retail price of less than $8,000; thus, the government will not be subsidizing your purchase of a tricked out Specialized Turbo Levo SL, or any one of the other high-end performance e-bikes that can retail for nearly twice the limit allowed by the E-BIKE Act.
Should the bill become law, however, the government will give you back 30% of the cost of the immensely popular Specialized Como, a commuter e-bike that retails for $3,000. Retailers across America have been unable to keep e-bikes like the Como – as well as offerings from smaller brands like Rad Power and Propella – in stock, a trend only accentuated by the COVID-19 pandemic. The lockdowns of the past year have been a boon for all of the outdoor sports industry, but perhaps no niche has benefited more than e-bikes. People who are working from home have more time on their hands, allowing them to pedal rather than drive for a quick errand, while those who continue to commute have grown wary of public transportation, a confluence of factors that have caused e-bike sales to explode since last March.
Or course, Panetta and Blumenauer don’t want people to just buy e-bikes; they want them to use them in place of their cars. To that end, the E-BIKES Act would also bring back a tax break that was temporarily suspended by the 2017 Tax Cuts and Jobs Act — the “qualified bicycle commuting reimbursement.”
This incentive allowed an employer to reimburse an employee, on a tax-free basis, for up to $240 annually for the reasonable expenses the employee incurred during the year for the purchase of a bicycle and bicycle improvements, repair, and storage if the bicycle was regularly used for travel between the employee’s residence and place of employment.
The E-BIKE Act would expand the definition of a “bicycle” to include an e-bike, while also allowing reimbursement for the cost to rent a bike through increasingly-popular “bikeshare” programs. The maximum annual reimbursement an employee could receive tax-free would jump from $240 to over $600.
Before you rush out to pick up your new e-bike, however, understand this: the E-Bike Act, should it become law, would not become effective until January 1, 2022.
While e-bikes – particularly e-mountain bikes – have created no shortage of controversy within the bike community for a variety of reasons, ranging from trail crowding to their use on public land to even general safety concerns, I say bring ‘em on. After all, now when some 55-year old guy smokes me up Buttermilk, I can just tell myself he was using a motor.