Motor Authority
In September 2008, Congress created a $7,500 tax credit for battery-electric plug-in hybrid vehicles. The amount of the tax credit depends on the size of the battery pack (in kilowatt hours of capacity). The Volt, with its planned 16kWh battery, will qualify for the maximum $7,500.
Presumable the new tax law is modeled after the 2006 hybrid tax credit law. I don’t think this is going to work for GM. Unfortunately, if you'll remember, Congress made a tax credit available for hybrid vehicles in 2006, where Toyota Prius qualified for the top tax credit of $3,150. This tax credit turned out to be a kind of government rope-a-dope, where first you buy the car at full value, thinking you’d get the advertised tax credit. Then a year later when you do your income taxes, you learn the credit is subject to an Alternative Minimum Tax (AMT) test, where most all middle and upper-middle income couples with children don't qualify for any of the tax credit -- that's the 'dope' part -- the American taxpayer.
My spouse and I didn't receive a dime in tax credits for the 2006 Prius purchased in February 2006, due to an alternative minimum tax 'test' that applies to the federal income tax credit. At the car dealer, I stood in line and paid top dollar for the car. At the time I purchased the Prius, there was no IRS guidance on the amount of the credits or how the credits would be administered. Purchasers had to act on faith that the federal credits were legitimate as advertised. A Prius purchased in February 2006 qualified for the full $3,150 credit (hooray!), but we got nothing ($0.00)! Got it? Nothing!!!!! Incidentally, my spouse and I don't earn enough to come under the AMT, but the AMT test still disqualified us from the credit completely. We both work and our AGI was $98,000, so go figure. I have read other postings on the Web that claim families of four with AGI (income) of between $80,000 and $750,000 don’t qualify for the hybrid tax credit. I don’t like citing this claim, because I don’t have independent verification from a tax accountant or IRS official, but I have read this in more than one Web posting. As I said, our AGI was less than $100k and we got no tax credit on the Prius, so why would I think our family would qualify for the $7,500 credit on a Chevy Volt in 2010?
On the low end of the income scale, families earning less than $80k should not buy cars costing $40k, Chevy Volts included. At the high end of the income scale, I doubt there will be enough Super Rich Americans willing to buy enough Volts to keep a factory production line running at a volume level necessary for commercial viability. I conclude that the 2008 Tax Law spells doom for Chevy Volt. Amendments anyone?
Presumable the new tax law is modeled after the 2006 hybrid tax credit law. I don’t think this is going to work for GM. Unfortunately, if you'll remember, Congress made a tax credit available for hybrid vehicles in 2006, where Toyota Prius qualified for the top tax credit of $3,150. This tax credit turned out to be a kind of government rope-a-dope, where first you buy the car at full value, thinking you’d get the advertised tax credit. Then a year later when you do your income taxes, you learn the credit is subject to an Alternative Minimum Tax (AMT) test, where most all middle and upper-middle income couples with children don't qualify for any of the tax credit -- that's the 'dope' part -- the American taxpayer.
My spouse and I didn't receive a dime in tax credits for the 2006 Prius purchased in February 2006, due to an alternative minimum tax 'test' that applies to the federal income tax credit. At the car dealer, I stood in line and paid top dollar for the car. At the time I purchased the Prius, there was no IRS guidance on the amount of the credits or how the credits would be administered. Purchasers had to act on faith that the federal credits were legitimate as advertised. A Prius purchased in February 2006 qualified for the full $3,150 credit (hooray!), but we got nothing ($0.00)! Got it? Nothing!!!!! Incidentally, my spouse and I don't earn enough to come under the AMT, but the AMT test still disqualified us from the credit completely. We both work and our AGI was $98,000, so go figure. I have read other postings on the Web that claim families of four with AGI (income) of between $80,000 and $750,000 don’t qualify for the hybrid tax credit. I don’t like citing this claim, because I don’t have independent verification from a tax accountant or IRS official, but I have read this in more than one Web posting. As I said, our AGI was less than $100k and we got no tax credit on the Prius, so why would I think our family would qualify for the $7,500 credit on a Chevy Volt in 2010?
On the low end of the income scale, families earning less than $80k should not buy cars costing $40k, Chevy Volts included. At the high end of the income scale, I doubt there will be enough Super Rich Americans willing to buy enough Volts to keep a factory production line running at a volume level necessary for commercial viability. I conclude that the 2008 Tax Law spells doom for Chevy Volt. Amendments anyone?