Sunday, September 24, 2006

Tax incentives on Toyota hybrids to decline Oct. 1

The Internal Revenue Service announced last week that Toyota Motor Corp. has reached the legal production limit -- 60,000 vehicles -- that Congress imposed on vehicles eligible for a tax credit. The announcement means that federal tax credits for Toyota and Lexus hybrid vehicles will be cut in half, but not until next month. The Toyota Prius hybrid tax credit of $3,150 -- the largest allowed by the IRS -- will shrink to $1,575. One group -- Hybrid Owners of America -- is upset by the tax trim. It says now is not the time to discourage hybrid ownership and cites a proposed law in California that would raise the ceiling on car pool lane access stickers for hybrids from 75,000 to 85,000. The bill is still waiting for the governor's signature. Meanwhile, 83,000 sticker applications are pending.

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