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On March 4, 2008, I purchased a Toyota Prius hybrid car, with a spacious interior, awesome fuel economy (45-50 mpg) at a manageable price (less than $30,000). The decision wasn’t easy, as I was leaving my Ford Expedition (very spacious, fairly expensive, and lousy fuel economy at 13 mpg). Although the large SUV was reliable, dependable, etc. I did not need it for my daily commute.
Funny thing is, I would have never considered this vehicle if I had not been forced to drive it as a rental car on my last trip to California . Thank you National Rental Car! Based upon my average annual driving distance, this car should save me $300 per month on gas, and will help me reduce my carbon footprint (1,000 fewer gallons of gasoline burned each year!)
As a tax person, the first thing I was interested in was whether I could get any tax breaks for purchasing a hybrid vehicle. I had heard that there was a federal tax credit, and also thought that Illinois would have some sort of program to entice me to purchase a car that would help the environment. Wow, was I mistaken. It turns out that the federal credit was all used up for Toyota (limited to only 60,000 cars sold). I could have purchased a Honda or GM car and received a credit, but that did not excite me much.
On the State side, it is amazing to me that there are thousands of exemptions for sales tax on things from pollution control equipment to manufacturing machinery and equipment, but nothing for hybrid cars. Luckily, I did discover that the State Treasurer must believe in helping the environment, because there was a linked-deposit program, whereby the State deposits money with certain banks at below market interest rates, and in exchange, the banks provide a $1,000 rebate for any person that finances a hybrid car in Illinois through the bank. My gift card from CHASE bank should arrive in 6 to 8 weeks.
Useful Links:
Hybrids – Region by Region Local Incentives
http://www.hybridcars.com/local-incentives/region-by-region.html
Hybrids – Federal Credits
http://www.hybridcars.com/federal-incentives.html
Illinois Treasurer’s Office – Hybrid Program
http://www.treasurer.il.gov/programs/cultivate-illinois/green-rewards.aspx
No information on this blog is intended as legal, tax or accounting advice. It therefore cannot be relied upon or interpreted as such advice. You should instead contact a TPC Professional if you are seeking guidance about any such issues.           
» 7 Comments
1Comment
at Wednesday, 12 March 2008 21:40
Great news for consumers choosing to 'go-green' by purchasing a hybrid car. But do you know if consumers can expect future tax incentives at the federal level for purchasing environmentally friendly products, homes, etc?
2Comment
at Thursday, 13 March 2008 16:24
Sure, check out something like the energy- efficient hot water heaters for example. A list of qualified energy efficiency improvements eligible for a credit are outlined in Energy Policy Act of 2005. Tax credits for hybrid vehicles are also included.
3"Managing Director"
at Tuesday, 18 March 2008 16:57
I have driven my new Toyota Prius 775 miles and only filled the gas tank twice, purchasing 17 gallons at an average price of $3.42. My Ford Expedition would have required 60 gallons. Happily, I have saved $147 in the first two weeks of owning the Prius, and saved the environment 43 gallons of gas emissions.
4"Sullivan"
at Thursday, 01 May 2008 02:30
Did you get your money from Chase? I bought a Prius March 26 and Chase seems to be playing dumb about the rebate as if they don't want to deal with it.
5Comment
at Friday, 02 May 2008 00:22
I'm getting ready to buy a Prius--1 year old---and I was told that many states waive the sales tax on hybrids. Is that the case for an Illinois resident buying a Prius in...say...New York? And are there any other incentives?
6"Managing Director"
at Friday, 02 May 2008 22:54
TJ - if you buy the used Prius from an individual, you won't owe sales or use tax in Illinois. However, if you buy it from a retailer, you will owe tax, even if purchased in NY.
7"Managing Director"
at Monday, 05 May 2008 14:23
Steven,
I have not received my rebate from Chase. They did say that it could take up to 8 weeks. Hopefully, the check is in the mail.
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