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January 13, 2006
JS-3078
Treasury and IRS Issues Guidance Regarding Hybrid and Lean Burn Vehicles
During a visit to the Detroit today, Treasury Secretary John Snow announced the issuance of IRS guidance regarding the tax credit for hybrid vehicles. The credit, which was enacted by the Energy Policy Act of 2005, may be as much as $3,400 for those who purchase the most fuel-efficient vehicles.
"The President understands how much the cost of energy impacts the budgets of American families and of the employers who create essential jobs. That's why he fought so hard for last year's historic energy bill – legislation which provided support for new energy-efficient technologies, like hybrid vehicles, so that so that every American can enjoy better energy security at lower costs.
"I'm pleased to announce the issuance of IRS guidance for the hybrid vehicle tax credit because the development and use of hybrid vehicles is a key step toward reducing gasoline consumption, emissions of air pollutants and greenhouse gas emissions. I commend the manufacturers who are making these energy-efficient and environment-friendly vehicles and hope that the President's energy bill proves to be an important step in their rising prominence on American roads.
"This IRS guidance establishes a process that manufacturers can use to certify the amount of credit the purchaser of the vehicle can claim. This is going to provide much-needed certainty to Americans who are purchasing these vehicles. It means they will be able to rely on the manufacturer's certification when they claim the credit on their tax return. This is good news for those consumers because they are also taxpayers who seek simpler, fairer tax filing, and it is good news for manufacturers who can now offer reassurance to customers on the ease of the tax rules," Snow said.
Hybrid vehicles have drive trains powered by both an internal combustion engine and a rechargeable battery. Many currently available hybrid vehicles will qualify for the tax credit. The guidance also provides a similar certification process for advanced lean burn technology vehicles.
The Energy Policy Act also provides tax credits for motor vehicles that are not covered by today's guidance. The other vehicles eligible for credits are fuel cell vehicles, alternative fuel vehicles, and hybrid heavy trucks. The IRS will issue guidance providing certification procedures for these vehicles in the near future.
REPORTS