of chapter 1 is amended by inserting after section 25D the following new section: 25E. Previously-owned qualified plug-in electric drive motor vehicles (a) Allowance of credit In the case of a qualified buyer who during a taxable year places in service a previously-owned qualified plug-in electric drive motor vehicle, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of— (1) $1,250, plus (2) in the case of a vehicle which draws propulsion energy from a battery which exceeds 4 kilowatt hours of capacity (determined at the time of sale), the lesser of— (A) $1,250, and (B) the product of $208.50 and such excess kilowatt hours. (b) Limitations (1) Sale price The credit allowed under subsection (a) with respect to sale of a vehicle shall not exceed 30 percent of the sale price. (2) Adjusted gross income The amount which would (but for this paragraph) be allowed as a credit under subsection (a) shall be reduced (but not below zero) by $250 for each $1,000 (or fraction thereof) by which the taxpayer’s adjusted gross income exceeds $30,000 (twice such amount in the case of a joint return). (c) Definitions For purposes of this section— (1) Previously-owned qualified plug-in electric drive motor vehicle The term previously-owned qualified plug-in electric drive motor vehicle means, with respect to a taxpayer, a motor vehicle— (A) the model year of which is at least 2 earlier than the calendar year in which the taxpayer acquires such vehicle, (B) the original use of which commences with a person other than the taxpayer, (C) which is acquired by the taxpayer in a qualified sale, (D) registered by the taxpayer for operation in a State or possession of the United States, and (E) which meets the requirements of subparagraphs (C), (D), (E), and (F) of section 30D(d)(1). (2) Qualified sale The term qualified sale means a sale of a motor vehicle— (A) by a person who holds such vehicle in inventory (within the meaning of section 471) for sale or lease, (B)