IRS Certifies Honda and Toyota Hybrids for Federal Tax Credits
June 7, 2006
The U.S. Internal Revenue Service (IRS) announced on June 1st that seven Honda vehicles will qualify for a federal tax credit if purchased after January 1st of this year. The credits run from $650 to $2,100 for various models of Honda's three hybrid vehicles: the Insight, Civic Hybrid, and Accord Hybrid. Since the tax credit depends in part on the vehicles' air emissions, only the Insight model with a continuously variable transmission (CVT) qualifies for the credit, as well as low-emissions versions of the Accord Hybrid and the 2005 Civic Hybrid, although no restrictions are placed on the credit for the 2006 Civic Hybrid. The IRS had previously certified the tax credits for Toyota and Ford; in late April, the IRS added the 2007 Toyota Camry Hybrid and the 2007 Lexus GS 450h, with credits of $2,600 and $1,550, respectively. See the IRS press releases about Honda and Toyota and the Honda press release.
On the state level, South Carolina has become the latest to offer tax credits for hybrids and other clean vehicles. The state tax credit will be 20 percent of the federal tax credit. The bill was approved by the legislature on May 25th and signed by the governor on June 1st. See the bill, H 4312, on the South Carolina Legislature Web site.