Hybrid Vehicle Credit will be reduced soon for Toyota models

As of the end of the 2nd quarter of 2006 (June 30, 2006), Toyota had manufactured and delivered more than 60,000 hybrid vehicles. This accomplishment has triggered a provision tucked away in the law that allows federal income tax credits for purchasing hybrid vehicles. The provision says that once a manufacturer reaches 60,000 hybrid vehicles delivered, credits on its vehicles will be phased out over a number of months. As the law reads right now, Toyota credits will be allowed at the full statutory amounts until Sept. 30, 2006, but will be cut to 50% of the statutory amounts on October 1, 2006 and will remain at that level until March 31, 2007. On April 1, 2007, the credit will be down to 25% of the original amount and it will be completely phased out on October 1, 2007.

As of the end of the 2nd quarter of 2006, no other manufacturers have reached the 60,000 vehicle mark.