Business Tax Incentives
Commercial (Heavy-Duty) Vehicles
Businesses are also eligible for passenger vehicle incentives.
What are the incentives for heavy-duty hybrid vehicles?
Buyers of heavy-duty hybrid vehicles can receive credits based on the weight class of the vehicle, its fuel economy relative to a comparable conventional vehicle, and the incremental cost. The vehicle must also meet a threshold value of "maximum available power," a measure of the percentage of total vehicle power available from the rechargeable energy storage system of the vehicle.
Credits are available for heavy-duty vehicles placed in service from January 1, 2006, through December 31, 2009.
Read an IRS summary of the credit here.
Who is eligible for the tax credits?
Buyers and lessors of qualifying vehicles. For purchases by tax-exempt entities, however, it is the seller who is eligible for the tax credit.
What are the incentives and how do they work?
The credit is defined as a percentage of the vehicle's incremental cost, where that percentage is determined by the fuel economy improvement of the hybrid relative to a comparable conventional vehicle. The incremental cost, in turn, is defined to be the cost of the vehicle above the cost of the conventional vehicle, except that the amount of the increment is capped for each weight class. The maximum credit available is: $3,000 for a vehicle weighing 8,501 to 14,000 pounds; $6,000 for a vehicle from 14,001-26,000 pounds, and $12,000 for a vehicle over 26,000 pounds. For more detail, visit the Tax Credits for Heavy-Duty Hybrids document on the American Council for an Energy-Efficient Economy website.
What do I have to do to qualify for these incentives?
These credits are available from 2006 until phased out for a given manufacturer, or through 2009. Follow the rules issued by the IRS, which are to be published sometime during 2006. We will post a link here, as soon as these rules are available
Where can I learn more about qualifying vehicles?
Very few heavy-duty hybrid vehicles are commercially available today. More information will be posted here as it becomes available.
