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Discussion Starter #1
The Washington Post had an article in yesterday's edition with some very intriguing information that might concern new Prius buyers. The article was entitled "Tax Breaks That Keep On Giving" and is available from the following link (warning- registration req'd): http://www.washingtonpost.com/wp-dyn/ar ... Sep25.html

Essentially the article discusses "the tax bill that Congress approved last week" and its various provisions for extending some tax benefits. About halfway through the article comes this tantalizing line:

"The bill also eliminates for this year and next the scheduled phase-down of credits and deductions for the purchase of electric and clean-fuel vehicles."

The way I read this it seems to indicate that, pending passage of the bill, there will be no reduction in the tax break and that Prius purchases this year and next will qualify for the full $2000 deduction.

Sounds like good news to me since I got mine in July this year.
 

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I agree that it appears from this article (thanks for the password) that we who take delivery of a new Prius during calendar 2004 or 2005 will not have to enter less than $2000 on our tax forms for the clean-fuel deduction.

Thanks for sharing this. I'm sure it will be watched closely.
 

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Discussion Starter #4
Just keep in mind that it appears that the legislation is still pending and we probably won't know for a while what the actual outcome will be.

I made an attempt to try to look up the specific language in the bill and its status, but in the limited time I had to devote to the search, the maze that is the Library of Congress web site defeated me.
 

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Important, reliable information is worth sharing with credit where due.

Varko of PriusChat is reporting this link to the Thomas web site for tracking legislation:

<quote of Varko's posting>

Here is the link to the specific measure that passed:

http://thomas.loc.gov/

Type "hr 1308" in the bill number search box.

Section 318 and 319 relate to the Prius.


----Text follows-----

H.R.1308

Working Families Tax Relief Act of 2004 (Enrolled as Agreed to or Passed by Both House and Senate)

--------------------------------------------------------------------------------

SEC. 318. ELIMINATION OF PHASEOUT OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES FOR 2004 AND 2005.

(a) IN GENERAL- Paragraph (2) of section 30(b) is amended to read as follows:

`(2) PHASEOUT- In the case of any qualified electric vehicle placed in service after December 31, 2005, the credit otherwise allowable under subsection (a) (determined after the application of paragraph (1)) shall be reduced by 75 percent.'.

(b) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service after December 31, 2003.

SEC. 319. ELIMINATION OF PHASEOUT FOR DEDUCTION FOR CLEAN-FUEL VEHICLE PROPERTY FOR 2004 AND 2005.

(a) IN GENERAL- Subparagraph (B) of section 179A(b)(1) is amended to read as follows:

`(B) PHASEOUT- In the case of any qualified clean-fuel vehicle property placed in service after December 31, 2005, the limit otherwise allowable under subparagraph (A) shall be reduced by 75 percent.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to property placed in service after December 31, 2003.

-----end text-----


This replaces the Title 26 Internal Revenue Code that had the gradual phase out of the tax credit/deduction.

Section 30:

http://uscode.house.gov/uscode-cgi/fast ... 0%20%20%20

and Section 179A:

http://uscode.house.gov/uscode-cgi/fast ... 0%20%20%20


</quote of Varko's posting>

Another post relates that the legislation was APPROVED by House and Senate on Thursday (Sept. 23) and is about to be signed into effect by the President.
 

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Discussion Starter #7
This article seems to further muddle the waters concerning the tax break. It seems clear that 2004 and 2005 will be $2000 but this is the first I've heard of 2006 dropping to $500 and then nothing in 2007. Of course by then Congress will probably extend them again...

IRS Certifies 2005 Toyota Prius For Clean-Fuel Tax Relief (DJN)

WASHINGTON (Dow Jones)--The Internal Revenue Service on Thursday said it has certified the
Toyota Prius 2005 model for buyers to claim a clean-burning fuel tax deduction of up to $2,000.
Tax relief signed into law this year extended a clean-burning fuel tax deduction of up to
$2,000 for certified vehicles first put in service in 2004 or 2005, with the deduction limit
dropping to $500 in 2006 and ending in 2007.

The Toyota Prius is a hybrid vehicle combining an electric motor with a gasoline-powered engine
to get better fuel efficiency with less emissions than conventional gasoline-powered engines.
The tax deduction covers the additional cost of building the hybrid vehicle that Toyota was
able to document. The one-time deduction on tax form 1040 must be taken in the year the vehicle
is originally used and can only be claimed by the original owner.
The IRS has previously certified the Prius' 2001-04 model years for the deduction, as well as
the 2000-04 model years of the Honda Insight and the 2003-04 model years of the Honda Civic
Hybrid.
IRS spokesman Anthony Burke said certification of eligible vehicles is an ongoing process.
-By Campion Walsh, Dow Jones Newswires
(END) Dow Jones Newswires
10-14-04 1050ET
 
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