By Joe Benton
ConsumerAffairs.com
November 21, 2007
The Honda Civic hybrid now joins the Toyota Prius as being so popular with car buyers that the government will not longer provide a tax credit to consumers who buy them.
The Internal Revenue Service announced that American Honda Motor Company, Inc, has submitted quarterly reports indicating that its cumulative sales of qualified vehicles to retail dealers reached the 60,000 vehicle limit during the calendar quarter ending Sept. 30, 2007.
That means that the federal tax credit available to most people buying the hybrid version of the Civic or any other Honda hybrid will be reduced.
Under the current tax law, the credit for buying a hybrid vehicle begins to phase out in the second calendar quarter after the quarter in which the manufacturer sells 60,000 of the vehicles.
The tax credit for all new qualified hybrid passenger automobiles or light trucks manufactured by Honda will begin to phase out on January 1, 2008.
Vehicles purchased before January 1, 2008 still qualify for the full credit.
For Honda hybrid vehicles bought on or after January 1, 2008 and on or before June 30, 2007, the credit will be 50 percent of the allowable amount.
Consumers buying vehicles on or after July 1, 2008, and on or before December 31, 2008, will receive 25 percent of the tax credit.
Here are the credit amounts for January 1, 2008, through June 30, 2008:
• Honda Accord Hybrid AT, Model Year 2007 $650
• Honda Accord Hybrid Navi AT, Model Year 2007 $650
• Honda Civic Hybrid CVT, Model Year 2007 $1,050
• Honda Civic Hybrid CVT, Model Year 2008 $1,050
Here are the credit amounts for July 1, 2008 December 31, 2008:
Honda Accord Hybrid AT, Model Year 2007 $325
• Honda Accord Hybrid Navi AT, Model Year 2007 $325
• Honda Civic Hybrid CVT, Model Year 2007 $525
• Honda Civic Hybrid CVT, Model Year 2008 $525
Beginning Jan 1, 2009, taxpayers who buy a Honda hybrid will be unable to claim any tax credit.
