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Tax Credit Consulting: Hybrid Vehicles Barre VT

As part of the Energy Policy Act of 2005, hybrid vehicles along with energy efficient home improvements and solar energy were made eligible for substantial tax credits. Tax credits are especially valuable as they directly reduce the amount of tax owed rather than reduce the taxable amount as is the case with deductions.

H&R Block
(802) 479-9100
TWIN CENTER PLAZA SHOPPING CENTER 1284 RTE 302
BERLIN, VT

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Danaher Attig & Plante PLC
(802) 383-0399
150 Kennedy Drive
South Burlington, VT
 
H&R Block
(802) 863-9999
155 DORSET ST
SOUTH BURLINGTON, VT

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Liberty Tax Service
(866) 871-1040
972 Putney Rd # 6
Brattleboro, VT

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H&R Block
(802) 388-3190
260 Court ST
Middlebury, VT
 
H & R Block
(802) 879-0683
187 Pearl St
Essex Junction, VT
 
Liberty Tax Service
(866) 871-1040
1197 Williston Rd
South Burlington, VT

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Lachance Susan CPA PC
(802) 878-7677
45 Logwood Cir
Essex Junction, VT
 
H&R Block Inside The Centre
(802) 388-3190
260 COURT ST
MIDDLEBURY, VT

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Guinness Tax Service
(802) 658-2132
34 Patchen Rd
South Burlington, VT
 
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Tax Credit Consulting: Hybrid Vehicles

Hybrid Vehicle Tax Credit

A hybrid vehicle is an automobile that uses electrical power coupled with a gasoline engine to produce a more fuel efficient power plant. The Hybrid Vehicle Tax Credit was designed to encourage the sales of these vehicles.

As part of the Energy Policy Act of 2005, hybrid vehicles along with energy efficient home improvements and solar energy were made eligible for substantial tax credits. Tax credits are especially valuable as they directly reduce the amount of tax owed rather than reduce the taxable amount as is the case with deductions. These tax credits are a prime example of the use of tax credits to encourage activities deemed to be in the best interest of the public. The Hybrid Vehicle Tax Credit is the common name for the part of the Energy Policy Act dealing with hybrid vehicles.

The importance of reducing the dependence of the United States on fossil fuels was the prime motivation for a generous tax credit for hybrid vehicles. The credit varied from qualified vehicle to qualified vehicle. In some cases, the credit reached as high as $3500 dollars. The hybrid vehicles tend to be a bit expensive and there is still not wide spread acceptance of the technology, so the generous credit was intended to spur sales. The IRS set the amount for each qualified vehicle.

The credit had a unique phase out method. The credit was intended to spur sales of 60,000 vehicles of each various qualified type. When the sales figure reached 60,000 for any individual model, the phase out began. In the quarter after the mark had been reached, the credit remained at 100%. In the 2nd and 3rd quarters after the mark had been reached, the credit dropped to 50%. In the 4th and 5th quarters after the mark had been reached, the credit dropped to 25%. After the 5th quarter, it ended completely.

The Hybrid Vehicle Tax Credit has had its intended impact on the sales and even the development of alternative energy vehicles. Some of the models have reached t...

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