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The Incentive of Hybrid Vehicles
Some cities, states, and the federal government offer a range of incentives to buyers of hybrid vehicles. These programs help bring more lower-emission higher-mileage vehicles onto the streets. |
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The following is a review of hybrid perks available across the U.S.:
Driving solo in carpool lanes
The federal government has a hand in regulating single-passenger access to carpool (High Occupancy Vehicle, or HOV) lanes. The recent federal comprehensive energy bill allows states to permit solo hybrid driving in HOV lanes.
California allows solo driving in HOV lanes for hybrids with EPA estimated mileage of at least 45 mpg that also meet the AT-PZEV emission standard. Prius qualifies, but unfortunately, Highlander Hybrid and Camry Hybrid do not. Drivers must have a Clean Air Vehicle Sticker affixed to the vehicle.
California has issued more than 52,000 of the stickers for which there is an $8 fee. The state is in the process of conducting a 90-day study to determine whether the program causes congestion in carpools lanes. If so, the state could stop issuing new stickers. If not, it will continue to issue up to 75,000 of them. The stickers become invalid in 2008 unless the state extends the program.
Florida -- and most recently New Jersey -- have similar programs in which Prius, Camry Hybrid and Highlander Hybrid qualify.
New York state also allows certain hybrid vehicles to access the HOV lanes regardless of how few passengers are in the cars. The program is limited to the Long Island Expressway and not all hybrids qualify. Only those that get at least 45 miles per gallon in highway driving, as determined by the Environmental Protection Agency in its testing laboratories, will be permitted in the lanes. For that reason, only the Toyota Prius, Honda Civic and Honda Insight qualify.
New York Governor, George Pataki, issued a statement saying, "By encouraging the use of cleaner, more energy-efficient vehicles on our roadways and providing New Yorkers with an incentive to use them, we will reduce our dependence on imported energy, and help improve our environment."
Free parking in certain cities
Some cities encourage the use of hybrid vehicles by waiving parking fees. Los Angeles allows free meter parking for hybrids with a California Clean Air Vehicle Sticker, valid through June 30, 2006. Buyers who purchase hybrid vehicles in San Jose get free parking at meters and in municipal lots. New Haven and Albuquerque issue decals permitting hybrid owners to park free at city meters.
State tax benefits: [1]
- Colorado grants a state tax credit for buyers of hybrid vehicles based on model year and other factors.
- Connecticut offers a sales tax exemption for purchases of new hybrids with an EPA-estimated highway mileage rating of at least 40 mpg.
- Illinois has a bill under consideration that would exempt hybrid vehicles and components from state sales tax.
- Louisiana allows a state income tax credit on the partial value of hybrid vehicles.
- New Mexico allows a one-time exemption of the excise tax, amounting to 3% of the purchase price, for hybrid vehicles with a minimum estimated EPA rating of 27.5 mpg.
- New York's governor has proposed three benefits for hybrid owners: a $2000 tax credit, a discount on highway tolls, and single occupancy driving in state carpool (HOV) lanes.
- Oregon has a state income tax credit of up to $1500 for buyers of qualifying hybrid models.
- Pennsylvania residents can apply for a $500 rebate to assist with the purchase of a hybrid vehicle. The state is also considering a bill to exempt hybrids from periodic vehicle inspections.
- Washington state exempts hybrids with EPA-estimated city mileage of 50 mpg or better from emission control inspections.
- Washington, D.C. exempts excise taxes on hybrids, and has lowered hybrid vehicle registration charges.
[1] This summary does not constitute tax advice. All persons considering the use of this information should consult with their own tax advisors to determine the specific amount of benefit, if any, that they may be able to claim on their federal or state income tax returns. Your tax advisor may also have further information on the many state and local tax incentives that may be available to hybrid vehicle owners.
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