House Passes Energy Bill

Yeah I just saw that too in some other articles:

"Similarly, close to $875 million in tax credits will be made available to those who buy hybrid gas-electric vehicles before 2010. A person buying a Toyota Prius, for instance, will receive a tax credit of at least $2,500, according to Toyota Motor Corp. spokeswoman Martha Voss. "

Wow. Wish I could have waited until next year to buy!

 

I don't know how they arrived at those figures. Looking at the text of the legislation, it appears as if the credit has a cap of $2,400 for passenger vehicle hybrids in the Prius' class.

What I get, based on the 2005 model year stats, is a credit of $2,000. The Prius is in the 3,000 lb "Vehicle inertia weight class" and, according to the EPA, gets 59.9 Adjusted City MPG. 59.9 MPG would be more than 225% of the 2002 MY City Fuel Economy figure (26.4 MPG) but less than 250%, yielding a credit of $2,000.

 

Also, a true credit against tax of $2,000 would actually put $2,000 in one's pocket. This is completely unlike an itemized deduction or adjustment to income.

 

I tend to agree with you. I was looking at $1200 cause I thought they were talking about average, but I see now they refer to city mpg. Wow, what an upshot for hybrids for basing it on city. $2000 is what I see in the text.

Maybe folks are looking in the "fuel cell" credits section, which is slightly higher, or maybe they are looking at old versions of the bill, some of which used to include 'conservation' credits in addition to the hybrid credits. The text I am looking at is here: http://energy.senate.gov/public/_files/H6_EAS.pdf This is the version that passed house yesterday.

In any case, much better than the $666 I'm getting this year...

 

Yep, good thinking there! The FC section contains both the $2,500 and $3,000 figures.

 

What the energy bill means to you.

"Tax breaks for the home

Under the new bill, consumers are eligible for up to a $500 tax credit for money they spend on energy improvements in their homes.

Homeowners, for example, can get $300 credit for highly efficient central air conditioner, heat pump or water heater. Installing energy-saving windows could be good for a $200 credit.

While not directly affecting your pocketbook, manufacturers of energy efficient washers, dryers and refrigerators are eligible for tax breaks themselves, which is expected to increase the availability and a drop in prices for these energy-saving appliances.

Consumers are also eligible for a 30 percent tax credit, or up to $2,000, for purchasing a solar-powered water heater or any fuel cell equipment for their home.

Consumers who want to take advantage of the energy bill tax breaks for their home must do so between Jan. 1, 2006 and Dec. 31, 2007.


Tax breaks on the road

Under the bill, American car buyers are also eligible for a number of tax breaks.

By purchasing a hybrid or diesel car after Jan. 1, 2006, consumers can get a tax credit anywhere from $500 to $3,400 dollars, depending on the fuel efficiency of the car.

The tax credit for a Toyota Prius, for example, would range anywhere from $2,500 to $3,000, according to Toyota."

Energy bill a mixed bag

The fine print: "The hybrid vehicle tax credit has its limits, however. Each manufacturer can apply the tax credit to just 60,000 vehicles and Toyota sells roughly 150,000 hybrids per year."

 

Well, you appear to possibly have something here! Does this mean only those vehicles put into service after this bill is signed? Or would it be all of 2005? Or does it still mean 2006 since that is the first full taxable year ending after the signing? This stuff is hard to read..... I would really be ticked off if my 3 week old prius was purchased a month too early!

 

This is bad for my attitude. Does this mean the manufacturer doles out the credit? It's not makin' me feel very positive about getting a credit for my March 2005 Prius purchase.

Can anyone find anything about this latest wrinkle in the actual text of the bill?

 

On a similar note, I got a deduction for my 2004 HCH. I traded it in on the 2005 Prius in July 2005.
Am I entitled to a deduction for the Prius when I file in April 2006? Or is there a time period limitation?

 

I don't see anything about 60,000. However, earlier today I stumbled across an old version of the bill, which I swear had some talk about the 60,000, quarterly phase out periods, etc. Just a hunch, but to you think that some of the press are looking at older version? (or worse yet, are we looking at bad version?)

 

More theorizing. At the top of Title XV I found this:

TITLE XV--ENERGY POLICY TAX INCENTIVES

SEC. 1500. SHORT TITLE; AMENDMENT OF 1986 CODE.

(a) Short Title- This title may be cited as the `Energy Policy Tax Incentives Act of 2005'.

(B) Amendment of 1986 Code- Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.


SO..... in SEC. 1531 when it talks about adding Section 30B, it is talking about adding it to the Tax Code. I wish I could succeed in finding that part of the tax code. But I'm betting that the credit maybe to Toyota for being kind enough to produce hybrids. Somewhere in the tax code or in the lawyers heads maybe it talks about how much goes to the consumer.

Here's that SEC 1531 bit:
SEC. 1531. ALTERNATIVE MOTOR VEHICLE CREDIT.

(a) IN GENERAL- Subpart B of part IV of subchapter A of chapter 1 (relating to foreign tax credit, etc.) is amended by adding at the end the following new section:

`SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

`(a) ALLOWANCE OF CREDIT- There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of--

 

Laws are like sausages. It's better not to see them being made.
Otto von Bismarck
German Prussian politician (1815 - 1898)

 

Well, perhaps here is where they're coming up with the 60,000 vehicle limitation. Senate Amendment (7125):

(f) Limitation on Number of New Qualified Hybrid and Advanced Lean-burn Technology Vehicles Eligible for Credit.--

(1) IN GENERAL.--In the case of a qualified vehicle sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection © or (d) shall be allowed.

(2) PHASEOUT PERIOD.--For purposes of this subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the first date on which the number of qualified vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after the date of the enactment of this section is at least 80,000.

(3) APPLICABLE PERCENTAGE.--For purposes of paragraph (1), the applicable percentage is--

(A) 50 percent for the first 2 calendar quarters of the phaseout period,

(B) 25 percent for the 3d and 4th calendar quarters of the phaseout period, and

© 0 percent for each calendar quarter thereafter.

 

Got that right! Further, according to one research paper, it's better that they not be made at all.....in terms of stock market gains at least :lol: :

A recent research paper by Michael Ferguson of the University of Cincinnati and Hugh Witte of The University of Missouri titled "Congress and the Stock Market" found that an astonishing 90% of all the gains in the Dow Jones Industrial Average occurred while Congress was not in session.

LINK: http://papers.ssrn.com/sol3/papers.cfm?abs...tract_id=687211

 

More info on th e 60,000 from the NY Times. 60,000 is the magic number over the entire 4 years, ***not an annual number***.

"If President Bush signs the energy bill, the clock begins ticking on Jan. 1, 2006, the date the tax credit would take effect. This year alone, Toyota projects it will sell 140,000 hybrids. If sales continue at that level next year, Toyota could hit the 60,000-vehicle cap in the second quarter, giving it until the end of the third quarter before its cars and trucks become eligible only for a reduced tax credit.

Honda faces a similar predicament. It estimates annual hybrid sales at 50,000, meaning its vehicles could become ineligible for the full credit sometime by mid-2007. That would be nearly two years before the credits expire Dec. 31, 2009."

http://www.nytimes.com/2005/07/30/business...s/30hybrid.html

Better get line up your Prius or HiHy purchase for early next year....