Promises, promises

Obama promises tax credits for hybrids but what are the specifics of the plan? Will it be structured like the current one to favor companies who don’t actually make hybrids (or very efficient hybrids). In other words, is this just good talk or is there substance behind the promise?

Missouri considering American only hybrid tax break

Hybrid car tax break gets first-round nod in the House

The Missouri House gave preliminary approval on Monday to a tax credit for hybrid cars.

An amendment added to the bill, however, limits the tax break to hybrids manufactured in the United States.

That means the Ford Escape and Chevrolet Malibu hybrids — both built in the Kansas City area — would get the credit. But the Toyota Prius, aka the best-selling hybrid on the road, wouldn’t qualify, since it’s manufactured in Japan.

The credit would be worth $2,000 or 10 percent of the value of the car, whichever is less, and would remain in effect for six years.

Local hybrid tax break

Wallingford considers tax break for hybrids
By: George Moore, Staff

WALLINGFORD – Town officials are considering whether to offer tax breaks to residents who purchase hybrid vehicles.

Under state law, the town can offer property tax exemptions for hybrid passenger cars with an estimated highway gas mileage of 40 miles per gallon or more.

The state does not offer a reimbursement, which means the town would have to shoulder the burden of the tax break.

A tax exemption would serve as an incentive to buy hybrid vehicles, which are cleaner but more expensive than traditional cars.

A 2008 Honda Civic Hybrid, for example, has a $22,600 base price, while a basic Honda Civic sedan has a $15,800 base price.

“I think we want to encourage people to buy cars that are easier on the environment,” said Republican Town Councilor Jerry Farrell Jr., who supports the exemption.

Farrell said he and his wife were considering buying hybrids a couple years ago but determined that buying them would not be economical, even with the expected fuel savings.

Councilors are debating whether to offer the tax exemption to all hybrid car owners in town or only to future buyers. Town staff members are researching whether state law allows the exemption to be given exclusively to future buyers.

Tax Assessor Shelby Jackson identified 94 hybrid vehicles in town that would be eligible if a tax exemption were retroactive.

The exemption would work by reducing the assessed value of the hybrid car.

A $1,000 exemption would provide an annual tax savings of $22.05 for each hybrid car owner, under the current tax rate. That exemption would cost the town $2,205 in tax revenue if it applied to 100 hybrid vehicles. A $5,000 exemption would provide each hybrid owner a $110.25 annual savings.

Democratic Councilor Michael Spiteri said a hybrid tax exemption would have been beneficial years ago but not today because the hybrid market appears to be thriving on its own.

“They’re selling themselves,” he said of hybrid cars. “I’ve got a few neighbors that own them. My brother has been waiting to buy one for a few years now. I haven’t heard any bad stories (about them) yet.”

The state statute defines a hybrid as a car that accelerates using two sources of onboard energy.
Pilgrim’s Harbor resident Joyce Kowalczyk purchased her Toyota Prius hybrid in September to reduce pollution, she said. A tax incentive, she said, would spur more people to buy cleaner vehicles.

“It seems like it might be a good incentive,” she said, “and it seems like, at this point, it might not cost the town too much unless everyone decides to buy a Toyota Prius.”

If the council were to pass a tax exemption, Farrell said, it should create a sunset provision to reassess the need for the exemption in the future. If hybrids become more popular, the town might want to stop offering the exemption, he said.

Vernon and Manchester have adopted hybrid vehicle exemptions, according to a report by Jackson. Vernon allows for a $1,000 exemption, and its ordinance expires in 2010, the report states.

Manchester allows for a $5,000 exemption, not to exceed five years for any vehicle.

The town of Orange recently approved a program in which anyone buying a hybrid starting Jan. 1 will receive full tax forgiveness.

Officials were not overly concerned that the program would cost too much money, because interest in hybrid vehicles is limited, Orange Selectman Anthony Nastri said.

“We didn’t visualize that we would have a large amount of people flocking to buy the cars,” he said, “but we felt those who were interested would do it.”

Tax credits for Toyota disappearing

Thanks to a scheme that favors companies that don’t produce many hybrids. From USAToday…

The tax credit begins to phase out after an automaker sells 60,000 vehicles.

Once a manufacturer’s sales hit the limit, buyers are eligible for the full credit until the end of the quarter in which the threshold was reached and through the next quarter. Then they’re eligible for half the credit for six months. For the next six months, the credit will shrink to 25% of the full amount, then it will disappear.

How this will affect two manufacturers of popular hybrids:

•Toyota. If you’re planning to purchase a Prius, the most popular hybrid, start looking. Toyota reached the 60,000 threshold last summer. Under the phase-out formula, taxpayers who buy a Prius before Oct. 1 will be eligible for a $787.50 tax credit. But after that date, you won’t be able to claim a tax credit for the Prius, or any other Toyota or Lexus hybrid.