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A slight tax advantage for hybrids

Discussion in 'Gen 3 Prius Main Forum' started by wfolta, Aug 17, 2009.

  1. wfolta

    wfolta Active Member

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    There was a thread a while back about various advantages of hybrids, like being able to drive in HOV lanes, tax credits, etc, but I couldn't find it...

    I believe that in that thread I listed that the Prius is exempt from emissions inspection, in Virginia. (Not sure if it's for the life of the car, or for a certain number of years.) But I just found another one:

    In Virginia, personal property tax (i.e. yearly tax on vehicles) money is given to localities and they depend on it as a part of their budget. But it's not popular, so the state passed legislation to subsidize the tax for everyone, giving the subsidized amount directly to the locality.

    In Arlington County (Virginia), the personal property tax is 5%. The subsidy (PPTRA) works as follows: The first $3,000 of assessed value is exempt, then next $17,000 is exempt a certain percentage, and the rest beyond that is not exempt.

    It appears -- though the bill and the website are a bit confusing -- that the percentage exemption, in Arlington County, for the $17,000 is 37% for non-hybrids and 90% for hybrids. So it appears that we saved $450 for a full year* by having a Prius III. (Qualifications are the same as for Special Clean Fuel plates, which allow 1 person in HOV-2 lanes.)

    * The bill was actually for June-December, so it was not for a full year and we actually saved less -- though of course paid less in the first place -- this year.
     
    #1 wfolta, Aug 17, 2009
  2. jay_man2

    jay_man2 jay_man_also

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    Nice. I wish Prince William County would figure it that way. And this year, at least, you can deduct the sales tax (3% in Virginia) on your Federal return.
     
    #2 jay_man2, Aug 17, 2009
  3. ALS

    ALS Active Member

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    If you can write off the mileage a Hybrid is a no brainer.

    The IRS lets you write off .55 cents per mile on your company car.

    12,000 miles works out to to a $6,600 tax deduction.

    With $3.00 gas

    A Chevy Malibu gets maybe on average 22 mpg.
    So you would use $1635 in gas driving a Malibu 12K miles.

    Prius would use $720 in gas driving the same 12K miles.

    That puts $915 in your pocket.
     
    #3 ALS, Aug 17, 2009
  4. MaggieMay

    MaggieMay Active Member

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    Submitted an expense report to my employer last week and got some good humored ribbed about my mileage. It's a good incentive to drive my car for work-related/expensable reasons! :D
     
    #4 MaggieMay, Aug 17, 2009
  5. Dirk Lerxst

    Dirk Lerxst New Member

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    Don't forget that the sales tax on new cars bought in 2009 can be deducted on 2009's taxes as long as they were purchases after Feb. 16, 2009.
     
    #5 Dirk Lerxst, Aug 18, 2009
  6. jay_man2

    jay_man2 jay_man_also

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    From the horse's mouth:

    Sales Tax Deduction for Vehicle Purchases
     
    #6 jay_man2, Aug 18, 2009
  7. Dirk Lerxst

    Dirk Lerxst New Member

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    Thanks! I wanted to post the link but hit the "must have 5+ posts" error, which I just passed, funny enough. Either way, this is one more thing pushing me over the edge to buying one very soon. Now to actually FIND one.
     
    #7 Dirk Lerxst, Aug 18, 2009
  8. radioprius1

    radioprius1 Climate Conspirisist

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    Is there a way to find any state-specific stuff? I live in Louisiana, and I've tried Google, but all the pages are like 3 years old =(
     
    #8 radioprius1, Aug 18, 2009
  9. 32kcolors

    32kcolors Senior Member

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    How's this different from the general sales tax deduction (which includes vehicle purchases) that you take instead of deducting state tax paid when itemizing?
     
    #9 32kcolors, Aug 18, 2009
  10. jay_man2

    jay_man2 jay_man_also

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    Good question. Virginia has a state income tax, so I don't get to deduct sales taxes normally (or at least the state income deduction is higher, easier to figure, etc.) I'd guess you're not seeing any additional benefit if you are already able to deduct sales taxes.
     
    #10 jay_man2, Aug 18, 2009
  11. 32kcolors

    32kcolors Senior Member

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    We've been able to deduct either state income tax paid or sales tax paid on federal returns for a while. Does this special deduction from the American Recovery and Reinvestment Act of 2009 allow you to deduct the vehicle purchase sales tax on top of the state income tax paid?
     
    #11 32kcolors, Aug 18, 2009
  12. jay_man2

    jay_man2 jay_man_also

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    That's how I read it.
     
    #12 jay_man2, Aug 18, 2009
  13. 32kcolors

    32kcolors Senior Member

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    So sounds like this only benefits people who live in states with income tax and does absolutely nothing for those who don't, as they're already able to deduct sales tax (including on vehicle purchases) paid, just as what you said. Talk about no state income tax residents subsidizing state income tax residents.
     
    #13 32kcolors, Aug 18, 2009
  14. jay_man2

    jay_man2 jay_man_also

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    And thank you so much!:p
     
    #14 jay_man2, Aug 18, 2009
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