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Taxes and Hybrids

If you bought a hybrid in 2003, you got a nice $2,000 federal income tax deduction (and it was nice). If you bought one in 2004, though, the federal income tax deduction was only $1,500 -- down to $1,000 in 2005 and $500 in 2006 before disappearing entirely in 2007. At least, until today: Green Car Congress points us to an article noting that the "alternative fuel and hybrid vehicle" deduction has been restored, pushed back up to $2,000 for 2004 and 2005 (although it still drops to $500 in 2006 and then goes away). So if you bought a hybrid this year, your tax situation will be a bit nicer than you expected.

And if you haven't bought one, but plan to, you might want to consider moving to (or, at least, visiting) Connecticut. As of October 1st, Connecticut will stop charging sales tax on hybrids. The state's 6% sales tax will no longer apply, reducing the final cost by about $1,200. In order to qualify, the vehicle must get at least 40 miles per gallon, so that rules out some of the new "upscale hybrids" which don't quite meet that standard. For now, though, the hybrids out there for sale all qualify, so go get one, if you can find one...


Listed below are links to weblogs that reference Taxes and Hybrids:

» Tax Breaks for Hybrids from GreenDigit.com
Congress restores tax breaks for hybrid vehicle purchses to 2003 levels. [Read More]


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