2006 Hybrid Tax Credits... Stinks of Politics!!
#11
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Actually, Ford independently developed their own technology for the Escape Hybrid. Ford then discovered it had developed technology covered by Toyota Patents. Ford and Toyota then cross licensed their Hybrid patents.
Originally Posted by Bemanix88
http://www.cnn.com/2005/AUTOS/tipsan...its/index.html
OK. Tax credits on hybrids is always good, especially if they can offset the cost of the hybrid system (and make it free to the consumer). But if you read this article, one thing will probably jump out at you...
The amount of the credit is based on the vehicle's fuel economy as compared to a similar 2002 model-year vehicle. To get any credits at all, a vehicle must get at least 25 percent better fuel economy than a similar 2002 vehicle.
I find that restriction a bit alarming. Obviously, lawmakers are favoring US manufacturers with this 2002 rule. Japan has been selling innovative and efficient hybrids long before 2002, and therefore will NOT qualify for these big tax breaks. Lagging US companies to date only have the Escape, which itself is licensed Toyota technology. And the rule will make it so that GM's planned hybrid trucks and SUVs that make a 2-3mpg improvement will receive heavy tax credits, but buyers of 70mpg Insights will get NOTHING. I wouldn't be surprised at all if US corporations have been doing some heavy lobbying to get this rule put into the law, so that their inferior cars can actually compete with the Prius, Civic, and upcoming hybrids like the Camry.
This is ridiculous. Lawmakers are swayed by special interests (US auto companies) at the cost of true progress (actually setting MPG standards).
[edit] OOPS, could a mod please change the title? It's misspelled and I don't want to look like a total fool in my first forum post...
OK. Tax credits on hybrids is always good, especially if they can offset the cost of the hybrid system (and make it free to the consumer). But if you read this article, one thing will probably jump out at you...
The amount of the credit is based on the vehicle's fuel economy as compared to a similar 2002 model-year vehicle. To get any credits at all, a vehicle must get at least 25 percent better fuel economy than a similar 2002 vehicle.
I find that restriction a bit alarming. Obviously, lawmakers are favoring US manufacturers with this 2002 rule. Japan has been selling innovative and efficient hybrids long before 2002, and therefore will NOT qualify for these big tax breaks. Lagging US companies to date only have the Escape, which itself is licensed Toyota technology. And the rule will make it so that GM's planned hybrid trucks and SUVs that make a 2-3mpg improvement will receive heavy tax credits, but buyers of 70mpg Insights will get NOTHING. I wouldn't be surprised at all if US corporations have been doing some heavy lobbying to get this rule put into the law, so that their inferior cars can actually compete with the Prius, Civic, and upcoming hybrids like the Camry.
This is ridiculous. Lawmakers are swayed by special interests (US auto companies) at the cost of true progress (actually setting MPG standards).
[edit] OOPS, could a mod please change the title? It's misspelled and I don't want to look like a total fool in my first forum post...
#12
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Thanks for the correction!
So the Prius WILL get tax credit even though it didn't improve mileage by 25%... now this law confuses me. What exactly are they basing it on, then?
So the Prius WILL get tax credit even though it didn't improve mileage by 25%... now this law confuses me. What exactly are they basing it on, then?
#13
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Originally Posted by Bemanix88
Thanks for the correction!
So the Prius WILL get tax credit even though it didn't improve mileage by 25%... now this law confuses me. What exactly are they basing it on, then?
So the Prius WILL get tax credit even though it didn't improve mileage by 25%... now this law confuses me. What exactly are they basing it on, then?
I stil wanna know the tax credit for 2006 HCH
#14
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Originally Posted by Bemanix88
Thanks for the correction!
So the Prius WILL get tax credit even though it didn't improve mileage by 25%... now this law confuses me. What exactly are they basing it on, then?
So the Prius WILL get tax credit even though it didn't improve mileage by 25%... now this law confuses me. What exactly are they basing it on, then?
#15
Re: 2006 Hybird Tax Credits... Stinks of Politics!!
I wouldn't be so sure about the 'in service' date. I think (not a CPA here) that the only way you could make that distinction valid is as a business expense. Even then, IIRC from old tax rules, in-service simply means when purchased. But do some research to be sure, I don't want to mislead anyone.
#16
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Originally Posted by PriusInsight
Actually, Ford independently developed their own technology for the Escape Hybrid. Ford then discovered it had developed technology covered by Toyota Patents. Ford and Toyota then cross licensed their Hybrid patents.
My brother wound up with a Ford Escape Hybrid 4x4 instead of a Prius for lifestyle reasons and is generally okay with his decision but has complained a lot about the quality/fit/workmanship of the interior for the price he paid for the vehicle. He said if he'd bought a stripped down Escape for 18,000 the interior might be okay, but when you pay over 30,000 for a car you expect a little more. He's used to driving luxury cars, though, so he may just be spoiled.
All of this is to say that Ford is not competing very well on the hybrid front, and I agree that it sounds like there were probably backroom deals made to try to slant the tax credit in favor of US manufacturers instead of forcing them to do something like make a Pontiac Solstice-looking car that gets equivalent or better mileage than the Insight.
#17
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Re: the tax credit...
So if the tax credit amount for the HCH2 is more than I actually owe (say I owe $1000 and the HCH@ credit is for $2000) do I get the rest of the money back?
So if the tax credit amount for the HCH2 is more than I actually owe (say I owe $1000 and the HCH@ credit is for $2000) do I get the rest of the money back?
#18
Re: 2006 Hybrid Tax Credits... Stinks of Politics!!
Got this from here... http://go.ucsusa.org/hybridcenter/incentives.cfm
Federal Tax Credits for Advanced Vehicles: On August 8, President Bush signed the comprehensive energy bill into law. Included were new tax credits for advanced vehicle technologies ranging from $250 to $3,400 depending on the vehicle's level of fuel economy improvement. For a limited time, quality hybrids like the Honda Civic Hybrid, Toyota Prius or Ford Escape Hybrid will qualify for tax credits in the range of $1,700-$3,150. The tax credits will be available beginning on January 1, 2006 and will be available through December 31, 2010, though they will expire earlier for the most popular hybrids. The full tax credits will be available until a manufacturer reaches 60,000 vehicles sold (60,000 for Toyota, 60,000 for Ford, etc.). Once a manufacturer has sold 60,000 vehicles, a one-year "phase out" will begin after the next complete calendar quarter; 50% of the credit will be available for that manufacturer's hybrids in the first two quarters of the phaseout period and 25% in the final two quarters. UCS estimates the following credits for each hybrid vehicle currently sold:
HEV Model Emissions Rating Tax Credit
2005-2006 Toyota Prius Bin 3 $3,150
2005 Honda Insight (automatic) Bin 5 $1,450
2005 Honda Insight (manual) Bin 9 $0
2005 Honda Civic Hybrid (automatic) Bin 2 $1,700
2005 Honda Civic Hybrid (manual 5-speed) Bin 2 $1,700
2005 Honda Civic Hybrid (lean burn, automatic) Bin 9 $0
2005 Honda Civic Hybrid (lean burn, manual 5-speed) Bin 9 $0
2006 Honda Civic Hybrid Bin 2 $2,100
2005 Honda Accord Hybrid Bin 5 $650
2005 Ford Escape Hybrid (front wheel drive) Bin 4 $2,600
2005 Ford Escape Hybrid (four wheel drive) Bin 4 $1,950
2006 Mercury Mariner Hybrid (four wheel drive) Bin 5 $1,950
2006 Toyota Highlander Hybrid (front wheel drive) Bin 3 $1,950
2006 Toyota Highlander Hybrid (four wheel drive) Bin 3 $2,200
2006 Lexus RX-400h (four wheel drive) Bin 3 $2,200
Sorry, I tried like hell, but couldn't get the table to format correctly in the post.
Federal Tax Credits for Advanced Vehicles: On August 8, President Bush signed the comprehensive energy bill into law. Included were new tax credits for advanced vehicle technologies ranging from $250 to $3,400 depending on the vehicle's level of fuel economy improvement. For a limited time, quality hybrids like the Honda Civic Hybrid, Toyota Prius or Ford Escape Hybrid will qualify for tax credits in the range of $1,700-$3,150. The tax credits will be available beginning on January 1, 2006 and will be available through December 31, 2010, though they will expire earlier for the most popular hybrids. The full tax credits will be available until a manufacturer reaches 60,000 vehicles sold (60,000 for Toyota, 60,000 for Ford, etc.). Once a manufacturer has sold 60,000 vehicles, a one-year "phase out" will begin after the next complete calendar quarter; 50% of the credit will be available for that manufacturer's hybrids in the first two quarters of the phaseout period and 25% in the final two quarters. UCS estimates the following credits for each hybrid vehicle currently sold:
HEV Model Emissions Rating Tax Credit
2005-2006 Toyota Prius Bin 3 $3,150
2005 Honda Insight (automatic) Bin 5 $1,450
2005 Honda Insight (manual) Bin 9 $0
2005 Honda Civic Hybrid (automatic) Bin 2 $1,700
2005 Honda Civic Hybrid (manual 5-speed) Bin 2 $1,700
2005 Honda Civic Hybrid (lean burn, automatic) Bin 9 $0
2005 Honda Civic Hybrid (lean burn, manual 5-speed) Bin 9 $0
2006 Honda Civic Hybrid Bin 2 $2,100
2005 Honda Accord Hybrid Bin 5 $650
2005 Ford Escape Hybrid (front wheel drive) Bin 4 $2,600
2005 Ford Escape Hybrid (four wheel drive) Bin 4 $1,950
2006 Mercury Mariner Hybrid (four wheel drive) Bin 5 $1,950
2006 Toyota Highlander Hybrid (front wheel drive) Bin 3 $1,950
2006 Toyota Highlander Hybrid (four wheel drive) Bin 3 $2,200
2006 Lexus RX-400h (four wheel drive) Bin 3 $2,200
Sorry, I tried like hell, but couldn't get the table to format correctly in the post.
#20
Re: 2006 Hybird Tax Credits... Stinks of Politics!!
A friend spoke to the IRS on this issue. Same as yours. They told him that they 'trust' everyone until proven otherwise. Generally 'in service' would be the date you had access to use the vehicle. Dec 24th? But .. if you claim it on your 2006 taxes ( refund due Apr '07 ) they will assume you put it in service after 1-1-06. All will be well - unless you are auditted - then you might have to show justification and argue with them over their terminology.
Another complicating factor is how is the IRS going to count the first 60000 units from each manufacturer in order to start and stop the clock. It will likely be based on state DMV registration dates. Take that for what it's worth. If your vehicle was registered in your state in Dec '05 and you claim 'in service' Jan '06 this make kick out your return and flag you for an audit.
How about some other complications:
Can you buy 10 Prius' and collect $31500 in tax credits?
What if a married couple each purchased a hybrid this year; must they file separately in 2007?
By all means speak to your tax advisor and then get actual citations and read them yourself to make sure it's understood. BTW the IRS to my knowledge now has not published the actual rules and guidelines needed to implement this law. Sometime this year they must.
Another complicating factor is how is the IRS going to count the first 60000 units from each manufacturer in order to start and stop the clock. It will likely be based on state DMV registration dates. Take that for what it's worth. If your vehicle was registered in your state in Dec '05 and you claim 'in service' Jan '06 this make kick out your return and flag you for an audit.
How about some other complications:
Can you buy 10 Prius' and collect $31500 in tax credits?
What if a married couple each purchased a hybrid this year; must they file separately in 2007?
By all means speak to your tax advisor and then get actual citations and read them yourself to make sure it's understood. BTW the IRS to my knowledge now has not published the actual rules and guidelines needed to implement this law. Sometime this year they must.