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Don't Mess With Taxes

Taxes. Sure you hate 'em, but you're stuck with 'em. Either that, or you're stuck in a federal jail cell. We'll make your tax tasks less, well, taxing, and help cure your personal finance ills with regular dosesof money news, notices, tips, commentary, insight and humor, courtesy of Texas journalist Kay Bell.

Hybrid Help Sought By Toyota Top Management

Posted on 11/30/2006 08:02 AM | Link | Post Comment

Want a Toyota hybrid but are unhappy that a purchase now will get you a much smaller tax break than buyers got a few months ago? You're not alone.

Toyota executives are calling for extension of the full tax credit for the Japanese automaker's popular hybrids, according to various Wire service reports (Reuters, AP).

Toyota's North American president, Jim Press, says sales of its hybrids have plummeted since the full credit expired in October. The most popular vehicle, the Prius, began the year with a $3,150 tax credit. Because Toyota has already sold more than 60,000 of such vehicles (well more: 144,218 through the end of September), the credit dropped to $1,575 on Oct. 1. Under the legislation that created the tax break, Toyota hybrid tax savings will be reduced further on April 1.

"By encouraging consumer support for a promising new technology, our government is supporting innovation and investing in our nation's future," Press told the Electric Drive Transportation Association. "We'd like to see those tax incentives continue."

The other makers of tax-break eligible autos, Honda, Ford and GM, have not yet hit the sales make that will lower their autos' credit. In fact, the companies are turning their lower sales into a sales pitch. In this Bloomberg report, "Honda Motor Co., the second-biggest seller of gasoline-electric autos, said buyers of its 2007 hybrid models still qualify for U.S. tax credits of as much as $2,100, more than consumers get for Toyota Motor Corp.'s Prius."

Toyota's Press also is calling for the federal government to walk the walk when it comes to energy efficient vehicles. Fleet purchases for military and government use, he says, would accelerate the development of alternative fuel vehicles.

Don't expect Toyota's suggestions to be considered in the coming lame duck session. Congress has a lot of other stuff on its agenda, including measures to keep 10 of 12 federal agencies running and a collection of other individual tax breaks that expired last year.

But come January keep an eye on Toyota's efforts. The company might just get some lobbying help from Dubya, who has previously voiced support for extending tax credits for hybrids and alternative vehicles.

You can read my previous blog items on the tax break here (this story will show up first, so just keep scrolling down). I also wrote this article for Bankrate.com explaining how the credit works.

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