Toyota Hybrid Tax Credit Expires

Buyers of Toyota hybrid cars that are looking for a break on their income taxes are now out of luck.

The IRS said Thursday that only Toyota and Lexus hybrids purchased before Oct. 1 are eligible for a tax credit intended to encourage sales of the fuel-efficient cars, because the company has hit a legal cap on the credit.

Hybrids have the ability to switch between internal combustion engines and electric motors to power themselves, with batteries that recharge during driving. They deliver better gasoline mileage than conventional vehicles.

The federal tax credit for new hybrid vehicles phases out starting when after a car maker has sold 60,000 hybrid or other fuel-efficient vehicles. Toyota and its Lexus luxury division hit that limit last summer. After that, the tax credits were halved.

Tax credits of up to $3,000 are still available for hybrids made by Ford Motor Co., General Motors Corp., Honda Motor Co. and Nissan Motor Co.

Customers who bought one of five Toyota and Lexus hybrid models between April 1 and Sept. 30 are eligible for tax credits ranging from $450 for the $104,000 Lexus LS 600h L to $787.50 for the Prius , which sells for $20,950.

Read more about IRS approved tax credits for 2007 and 2008 Model Year Hybrids.

[source: AP]