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Update on 2006 Hybrid Tax Credit and Incentives:
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Will a new vehicle save you money? |
The Honda hybrid vehicle certifications recently acknowledged by the IRS and their credit amounts are:
| Honda Civic Hybrid CVT Model Year 2006 | $2,100 |
| Honda Civic Hybrid (SULEV) MT Model Year 2005 | 1,700 |
| Honda Civic Hybrid (SULEV) CVT Model Year 2005 | 1,700 |
| Honda Insight CVT Model Year 2005 | 1,450 |
| Honda Insight CVT Model Year 2006 | 1,450 |
| Honda Accord Hybrid AT Model Year 2006 | 1,300* |
| Honda Accord Hybrid AT Model Year 2005 | 650 |
| *2006 Honda Accord Hybrid AT without updated control calibration qualified for a credit amount of $650.00. |
Updated summary of the credit for qualified hybrid vehicles
In addition to the Honda vehicles shown above, the IRS on June 1 acknowledged the manufacturers' certifications of the following qualified hybrid vehicles and credit amounts. (Additional vehicles may subsequently be acknowledged.):
| 2006 Ford Escape Hybrid Front WD | $2,600 |
| 2006 Ford Escape Hybrid 4WD | 1,950 |
| 2006 Mercury Mariner Hybrid 4WD | 1,950 |
| 2005 Toyota Prius | 3,150 |
| 2006 Toyota Prius | 3,150 |
| 2006 Toyota Highlander 2WD and 4WD Hybrid | 2,600 |
| 2006 Lexus RX400h 2WD and 4WD | 2,200 |
| 2007 Toyota Camry Hybrid | 2,600 |
| 2007 Lexus GS 450h | 1,550 |
Updated taxpayer requirements
According to the June 2006 updated IRS Summary of the Credit for Qualified Hybrid Vehicles, taxpayers must meet the following requirements in order to qualify for the hybrid tax credit:
1. The vehicle must be placed in service after December 31, 2005 and purchased on or before December 31, 2010.
2. The original use of the vehicle must begin with the taxpayer claiming the credit.
a. The credit may only be claimed by the original owners of a new, qualifying, hybrid vehicle and does not apply to a used hybrid vehicle.
3. The vehicle must be acquired for use or lease by the taxpayer claiming the credit.*
a. The credit is only available to the original purchaser of a qualifying hybrid vehicle. If a qualifying vehicle is leased to a consumer, the leasing company may claim the credit.
b. For qualifying vehicles used by a tax-exempt entity, the person who sold the qualifying vehicle to the person or entity using the vehicle is eligible to claim the credit, but only if the seller clearly discloses in a document to the tax-exempt entity the amount of credit.
4. The vehicle must be used predominantly within the United States.
*NOTE: The first line of Item #3 may give the impression that a taxpayer may claim the credit when leasing a vehicle. It is important to note that it is the leasing company that may claim the credit, not the taxpayer leasing the vehicle: This according to IRS tax law specialist John Chilgren who reports that regulations on the lease details of the hybrid tax credit are still in the process of being finalized. Chilgren suggests taxpayers keep up with hybrid tax credit updates by going to www.irs.gov and typing in the word Hybrid in their Search bar.
Americans and Detroit stepping up to the hybrid plate
"An outrageous outbreak." That's what Sales rep Paul D'Angelo of the Smithtown, New York Toyota dealership says he's witnessed in customer interest and sales of their hybrids in 2006. "Since last year, the increase in demand has doubled," says D'Angelo, "and now one out of ten customers is coming in looking for hybrids." Despite Toyota's efforts to increase production, D'Angelo says his customers have had to wait months for the Toyota Prius; a little less time for the Toyota Camry.
A Gallop poll released in April 2006 shows that most Americans say they would consider buying a hybrid car when making their next car purchase. This will be good news to Ford Motor Company. In September 2005, Ford announced it was boosting production of hybrid vehicles tenfold by 2010, when they plan to have more than half of their Ford, Lincoln and Mercury lineup with hybrid capability.
Be alert to the increasing plethora of hybrid credits and incentives
Virtually every day another hybrid incentive is added to the mix of federal, state, local and corporate offerings. Two days prior to this writing Bank of America Corporation announced that it will reimburse $3,000 to employees purchasing a new hybrid vehicle; this cash offering available to the more than 21,000 employees who live within 90 miles of Boston, Charlotte, and Los Angeles.
Want to know exactly what hybrid incentives you are eligible for? A great place to start is the Union of Concerned Scientists' invaluable hybrid website, www.hybridcenter.org. Click on Hybrid Incentives under the Consumer Center heading. There you will find a list of all federal and state incentives for prospective hybrid owners; those already enacted and others still being considered. For each of the 39 states featured, you'll find anywhere from one to 15 incentives.
In light of the rise of gasoline prices in recent years, consumers have increasingly been drawn to hybrid vehicles because of the better-gas-mileage factor. Automotive information site Edmunds.com points out it is important for consumers to note other advantages as well. These include lower consumption of natural resources, longer range between gasoline fill-ups, less emissions due to smaller more efficient engines; and in some cases, lower maintenance costs.
Perhaps most important - and according to the June 2006 testimony of former Federal Reserve Board chairman Alan Greenspan to the Senate Foreign Relations Committee -- Americans can dramatically lower demand for oil by switching to more fuel-efficient hybrid vehicles, and thus significantly reduce the perils of being at the mercy of unpredictable foreign oil producers.
Copyright 2006, Attard Communications, Inc.
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