Federal tax breaks for purchasers of hybrid cars in the United States have started shrinking since fall. But according to the Internal Revenue Service, Nissan vehicles can continue to claim the Alternative Motor Vehicle Credit.
The IRS’s quarterly review revealed that the Japanese automaker sold 2,094 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. The allowable credit amount for the 2007 Altima Hybrid, Nissan’s only certified hybrid vehicle, is $2,350. Taxpayers are allowed to claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle. The announcement comes after the IRS concluded its quarterly review of the number of hybrid vehicles sold.
Taxpayers who seek the tax credit could purchase early because the full credit is only available for a limited period. They may also claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th vehicle.
For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, they may claim 25 percent of the credit. Nevertheless, no credit is allowed after the fifth quarter.
The Nissan Altima Hybrid Electric equipped with Nissan cornering lights is the automaker’s first hybrid car. The hybrid is equipped with a 2.5 L QR25DE engine, CVT and electric motor or generator. Nissan entered an agreement with Toyota Motor Corp. to use some of its hybrid technology to come up with all-new Altima. Also, the third largest Japanese automaker has asserted that succeeding hybrid models will be based on in-house hybrid technology.
Up to 40,000 Altima Hybrids are built at Nissan’s Smyrna plant annually. For the 2007 model year, sales of the hybrid model are limited to California, Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island, and Vermont. Other states will follow in subsequent years.
The IRS is stirring the hybrid car market, handing out some dreary tax credit news for the Toyota Prius along some good news for General Motors and Nissan. The moribund scale for tax credits prompted by the production limit will slash credits for Toyota and Lexus hybrids in half by the end of September, and to a quarter of the present rate next April. Still, full tax credits are available for Toyota’s market-leading hybrids through the end of the current quarter. Moreover, it is expected that sales will be increased as purchasers rush to get the maximum tax break.
After reviewing Toyota’s 2007 first quarter sales, the IRS has ruled that the Prius purchasers may continue to claim only a small tax credit. The total amount of the credit now available to a Prius purchaser is only $787.50.
The IRS also announced that purchasers of qualified GM hybrid vehicles may claim a tax credit ranging from $250 to $1,300. The GMC Sierra hybrid trucks and the Chevrolet Silverado hybrids carry a tax credit of $250 for two wheel drive models and $650 for four wheel drive models. The Saturn Vue Green Line has a $650 credit and the Aura Hybrid carries a $1,300 credit.
For this year, tax credits will still be available for the Ford Escape Hybrid 2WD ($2,600), Ford Escape Hybrid 4WD ($1,950), Honda Accord Hybrid AT ( $1,300), Honda Accord Hybrid Navi AT ($1,300), Honda Civic GX ($4,000), Honda Civic Hybrid CVT ($2,100), Lexus GS 450h ( $775), Lexus RX 400h 2WD and 4WD ($1,100), Mercury Mariner 4WD Hybrid ($1,950), Toyota Camry Hybrid ($1,300), and the Toyota Highlander Hybrid 2WD and 4WD ($1,300).