Jan. 26, 2007: San Francisco Chronicle—Hybrid Tax Credit Bait and Switch
Summary: "If you are among the 150,000-plus proud purchasers of a hybrid gas-electric car during 2006, please sit down. I have bad news. Many of you will not receive the full tax credit that you expected.
To recap, in 2005, Congress passed an energy bill with numerous incentives to encourage conservation. One of these provisions provided a tax credit, beginning January 2006, for purchasers of approved hybrid gas-electric automobiles. This tax credit can be substantial — up to $3,150 for the Toyota Prius, perhaps the best known hybrid.
Unfortunately, unless you earn more than $750,000 a year, you can’t be sure you will qualify for the full published credit for your vehicle. This "gotcha" applies even if you bought the car well before October, when the tax credit for Toyota vehicles began to be reduced, per the 2005 law, because more than 60,000 Toyota hybrids had been sold."
This article shows why Congress should act now to fix the hybrid tax credit (as well as indexing the alternative minimum tax to inflation). While they’re tinkering with it, lawmakers might as well remove the 60,000 cap on sales so that buyers of Toyota hybrids aren’t penalized for their car’s popularity.