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Tax credits / incentives for hybrids?

SylviaSylvia Posts: 1,636
edited March 15 in Toyota
Does your state offer some type of incentive for buying a hybrid? Do you find it confusing? Here's the place to ask your questions.


  • gagricegagrice San DiegoPosts: 28,850
    Sounds like Oregon is serious about hybrids. A $1500 tax CREDIT is substantial. Unless of course the Toyota dealers are greedy like in CA. ml
  • rpgolferrpgolfer Posts: 157
    gagrice- I live in California and I should be able to file for a $1500 tax credit this year with my returns. Last year if I had taken possession, I could get $2k. I am going to persue the return with my tax guy when I do my '04 taxes.
    mfullmer- Drive that new Solara (congrats) down to the Toyota dealership and buy BOTH new cars!! This way you'll have that shiny new Solara, be in debt up to your ears and the Salsa Red Pearl that you've always wanted, too!
  • gagricegagrice San DiegoPosts: 28,850
    I wonder how many states offer tax credits on hybrids?
  • tempusvntempusvn Posts: 119
    I know that up until July 1, Maryland forgave all state sales tax on hybrids (5% of purchase price), which was significant. They haven't renewed that one yet.

    West Virginia is great, they offer:

    "a tax credit equal to 40 percent of the incremental cost for the purchase or lease of a dedicated alternative fuel vehicle. An additional credit equal to 30 percent (for a total of 70 percent) of the incremental cost is provided for the acquisition of a dedicated alternative fuel vehicle that meets stringent emissions standards"

    When you take calculate that out for a Prius, it works out to a direct writeoff of $3,750 against state income taxes, but you have to spread it over three years.
  • mfullmermfullmer Posts: 819
    Actually the next house we buy definitely has to have a three car garage then I can get a Prius and we can use that and the Lexus to commute and save the Solara for the weekends!

    Three car garages are hard to come by here in Atlanta. In CA I never had a house that didn't at least have a three car garage!
  • CA has no state tax credit on hybrids. You're referring to the Federal DEDUCTION of $1500 for 2004. This will go down by $500 each year and phase out in 2006.

  • rpgolferrpgolfer Posts: 157
    solar_dad- You're right, Ca doesn't have state tax credits, only the feds do. But, there are legislations pending to allow hybrids in the "diamond" (HOV) lanes. They just notified me that smog checks are no longer needed and I'm hoping that registrations can be extended beyond the current 2 yr period. I, like John, believe that HSD technology will be common place and hybrids are here to stay.
  • stevedebistevedebi LAPosts: 3,788
    "They just notified me that smog checks are no longer needed and I'm hoping that registrations can be extended beyond the current 2 yr period."

    Wonder who made that bone headed mistake? The Prius has an ICE, which needs to be monitored for comopliance with CARB. Perhaps it could use a longer period between checks, but it still needs to be checked...
  • oranuoranu Posts: 10
    Assuming purchase of an Accord Hybrid in California for $33,505 prior to end of this month in 2004, and a top marginal tax bracket of 28%, how much money would be saved because of the 2004 tax benefit? (As I am confused by the tax benefit, even an approximation will be of help.)

  • backybacky Twin CitiesPosts: 18,682
    First there is the question as to whether the HAH will qualify for the Federal tax deduction, which for 2004 was restored to $2000 (note it's a tax deduction, not a tax credit). Perhaps one of the new owners of the HAH can tell us what they heard from dealers about the tax deduction. If the HAH qualifies, you can deduct $2000 from taxable income, so your savings depends on your tax bracket.
  • I live in New York and have bought a Toyota Prius 2005. I have heard State laws differ from state to state and I am looking for facts & not fiction about the hybrids. Example(s) Federal Tax Credit of $2000 from IRS, Each state may offer more tax credits or rebates. State of Conn. offers no Tax when you buy a hybrid. In Washington D.C. you may use the H.O.V. lanes with only one person in the car, as long as it is a hybrid.


    What other laws exist and how do people go out and find them for the state they are in?


    Please help me find out more information.
  • larsblarsb Posts: 8,204
    "State tax credits, deductions, and exemptions are available in California, Colorado, Maryland, New York, and Oregon. New Jersey offers rebates to local government entities purchasing hybrids. In Washington, some hybrids vehicles are exempt from emission control inspections. "


    This page also contains a PLETHORA of Hybrid tax info and other handy tips:

  • larsblarsb Posts: 8,204
    "In addition to federal incentives, individual states offer additional incentives, rebates, or grant programs to encourage purchase and leasing of hybrid and low/zero emission vehicles. For example, Colorado currently offers a state tax credit of $2,678. For Colorado residents, combining the state tax credit with the federal tax deduction would essentially eliminate the $3,000 premium paid for the hybrid technology."
  • Thank you for writing to the State of Connecticut Department of Motor

    Vehicles. The DMV is always working to improve customer service. We hope

    that this process will give you the service you need and answer the

    questions you have.


      It is true, Hybrid vehicles are tax exempt. If you give me a fax number I

    can forward additional info to you.


    Again, thank you for writing to the Department of Motor Vehicles. If you

    have additional questions, please contact us again at:
  • Maryland's incentive is simple.


    No sales tax on hybrids. So you save about $1000 instantly.


  • dw438dw438 Posts: 41
    In New York you can get a sales tax refund by filling out a form (AU-11) and sending in separate from your tax return. State says they are three months behind in processing.

    You also can get a credit on income tax by filling out another form (IT-253. Alternative Fuels Credit) and filing that with your income tax forms.

    Go to this link on the NY State tax dept. web site:

  • There is a State by State - Tax, Carpool lane use & other hybrid cars incentives:



    local tax and other hybrid incentives


    We're doing our best to track hybrid incentives across the country. Please verify exact current rulings with appropriate state or city officials. Hybrid car buyers also qualify for federal tax deductions, and in some states, solo use of carpool lanes.


    New York's:

    New York's Alternative Fuel (Clean Fuel) Vehicle Tax Incentive Program offers tax credits and a tax exemption for purchasing new hybrid electric vehicles (HEVs), alternative fuel vehicles (AFVs), and/or install clean fuel vehicle refueling equipment. Purchasers of qualified HEVs are eligible for a tax credit of up to $3,000, depending on the vehicle's fuel economy. To qualify, a vehicle must draw propulsion energy from both an internal combustion engine (or heat engine that uses combustible fuel) and an energy storage device; and must employ a regenerative braking system that recovers waste energy to charge that device, and, for model year 2004 and later, must meet or exceed the California LEV II emission standard. Current production models such as the Toyota Prius and Honda Insight qualify. The maximum value of the incentive is $5,000 for vehicles weighing less than 14,000 pounds (lbs.) gross vehicle weight rating (GVWR). The incremental cost of clean-fuel vehicles is exempt from state sales tax; this exemption expired February 28, 2004. These incentives apply to vehicles and fueling property placed in service by December 31, 2006. For more information, please contact the New York State Energy Research & Development Authority (NYSERDA) at 866- NYSERDA, via email at, or visit the Web site at (Reference Senate Bill 4523, 2003)
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