Sales Tax Exemption for Hybrids Ends Soon

By dancurranjr On May 28th, 2009

irsThe states sales tax exemption for most hybrid cars will end in a few months.

The sales tax exemption for cars with highway mileage of at least 40 miles per gallon took effect Jan. 1, but was repealed during this year’s legislative session. The exemption ends Aug. 1.

Hybrid vehicles will still be exempt from the separate 0.3 percent motor vehicle sales tax until Jan. 1, 2011. New cars that run on fuels such as natural gas, propane, hydrogen or electricity will continue to be exempt from all sales taxes through Dec. 31, 2010.

Auto Tax Credits For Eco-Friendly Hybrid Cars

By dancurranjr On May 25th, 2009

irsAuto tax incentives for Hybrid cars and electric vehicles are being phased out later in 2009. However, there could be new tax credits for these eco-friendly cars. The whole purpose of these tax deductions is to reduce the amount of carbon emissions, which provide cleaner air quality.

The tax incentives started with the Energy Policy Act of 2005, which replaces the clean-fuel burning deduction with a tax credit. A tax credit is subtracted directly from the total amount of federal tax owed, thus reducing or even eliminating the taxpayer’s tax obligation. The tax credit for hybrid vehicles applies to electric vehicles purchased or placed in service on or after January 1, 2006.

The credit is only available to the original purchaser of a new qualifying vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit. The Hybrid vehicle must also have a drive train powered by both an internal combustion engine and a rechargeable battery.

This is a list of some of the models, which qualify, including the amount for the tax credit:

  • Chrysler Aspen Hybrid – $2,200
  • Dodge Durango Hybrid – $2,200
  • Ford Escape Hybrid 2WD – $3,000
  • Ford Escape Hybrid 4WD – $1,950
  • Mazda Tribute Hybrid 2WD – $3,000
  • Mazda Tribute Hybrid 4WD – $1,950
  • Mercury Mariner Hybrid 2WD – $3,000
  • Mercury Mariner Hybrid 4WD – $1,950
  • Nissan Altima Hybrid – $2,350

This is not a complete list and there might be another wave of tax credits for all-electric vehicles. Most automakers, including Ford, General Motors, Honda, and Toyota are already building new prototypes. These prototypes will enter the market in late 2010, 2011, and 2012.

Critics of the Energy Policy Act and the recent tax credits say the government should do more to help convert gasoline powered automobiles to Hybrid and electric solutions. For example, the government is already phasing out the tax credits during the economic recession. The critics feel that the tax credits should be extended for at least another 24 months.

The tax credits started with a $7,500 deduction which actually helped the new Hybrids gain respect and awareness. However, consumers can still save fuel costs as most of the new Hybrids can travel up to 50 miles without using a single drop of gasoline. As gas prices rise, drivers can switch the vehicle from gas to electric power for shorter travel rides.

IRS Plugs Into Incentives for Hybrid Cars

By dancurranjr On May 16th, 2009

irsThe IRS, in line with the Obama Administration’s energy conservation program, is working on incentives to encourage the purchase of plug-in electric vehicles.

“The new administration has made it clear to major American auto makers that the manufacture of plug-in electric cars is essential both to their survival,” said Robert Manero, a tax partner at CPA firm Maillie, Falconiero & Company, LLP, with offices in Oaks, Pottstown and West Chester, Pa. “To make this more appealing to manufacturers and buyers, the IRS is preparing guidance on tax incentives that range from $2,500 to $15,000 for the purchase of these cars.”

Plug-in hybrid electric vehicles are moving from the drawing board to the assembly lines here and abroad. General Motors, for example, advertises the Chevy Volt.

Low-speed vehicles with at least four wheels that draw propulsion through a rechargeable traction battery with a capacity of at least four Kilowatt-hours may qualify for at least $2,500. Higher credit ranges from $7,500 to $15,000, depend on vehicle weight and battery capacity.

“With the price of the initial American plug-in hybrids expected to cost $30,000, the tax incentives would seem to place them in the price range of the average American taxpayer,” Manero said.

To get the tax break, the hybrids must be purchased after Feb. 17, and before Jan. 1, 2012.

SOURCE: Community Pub

Plan Would Divvy up $1 Million to Hybrid Buyers

By dancurranjr On May 6th, 2009

irsPurchasers of hybrid vehicles wouldn’t have to pay their first year’s state registration fee under a plan being pursued by the Office of Energy Conservation.

Energy Office officials want to use $1 million in federal funding to offer the incentive to purchase the fuel-saving cars over the next three years.

Marty Ramirez, a spokesman for the Energy Office, told the Senate Finance Committee on Wednesday that he expects the request to be approved by the federal Energy Department.

Under the proposal, the buyer of a hybrid car would receive from the automobile dealer a certificate to present at the Department of Motor Vehicles. The DMV would accept the certificate as payment and bill the Energy Office for the registration fee.

“It will be on a first come, first served basis because there is no way to allocate it out to the dealers,” Ramirez said.

The average cost of the first year of registration for hybrid vehicles is about $500. The program would cover about 20,000 vehicles, Ramirez said.

The state should know by mid-June whether it can implement the program.

SOURCE: Las Vegas Sun

Hybrid Car Tax Credit Information

By dancurranjr On April 26th, 2009

irsThe Ford Motor Company has reached a milestone when it comes to hybrids, and that milestone could affect your decision if you plan on going down that road.

Ford has now sold more than 60,000 hybrids.

In fact, the company has sold 66,157. That means you can no longer claim the full tax credit that you used to be able to claim on a vehicle like that.

In fact, you can now only claim half the amount, and there’s a limit on that too. You have to buy the vehicle before September 30th.

After that, you can just claim 25 percent of the full credit, and starting April 1,2010, you can claim nothing.

So, the sooner you act on this, the bigger tax credit you’ll get.

I’ve posted below a list from the Ford Motor Company, estimating how much a tax credit you can get. This is the full amount, so you’ll have to deduct a percentage, depending on when you plan to buy.

  • 2005, 2006, 2007 Ford Escape 2WD, $2,600;
  • 2008, 2009 Ford Escape 2WD, $3,000;
  • 2005, 2006, 2007, 2009 Ford Escape 4WD, $1,950;
  • 2008 Ford Escape 4WD, $2,200;
  • 2010 Ford Fusion, $3,400;
  • 2008, 2009 Mercury Mariner 2WD, $3,000;
  • 2006, 2007, 2009 Mercury Mariner 4WD, $1,950;
  • 2008 Mercury Mariner 4WD, $2,200;
  • 2010 Mercury Milan, $3,400

Source: WRDW