Motor Vehicle Incentives

House Bill 1331 (HB 1331), “Incentives for Efficient Motor Vehicles”, created financial incentives to help consumers purchase efficient motor vehicles. HB 1331 extends tax credits to consumers who purchase or convert vehicles that use “cutting edge” technology and petroleum reduction technology, including plug-in hybrid electric conversion technology. The bill, which extends tax credits until 2015 for most technologies, encourages consumers to consider a vehicle’s air pollution score, its fuel economy, and its carbon footprint before making a vehicle purchase. See below for a list of qualifying vehicles.

What does HB 1331 do for you?

• Extends tax credits for the purchase or conversion to a compressed natural gas vehicle through 12/31/2015
• Creates new tax credits for the purchase of or conversion to a plug-in hybrid electric vehicle.
• Creates new tax credits for diesel-electric hybrid conversions.
• Creates new financial incentives for the purchase of mobile idle reduction technologies.

What else do you need to know?

• Some credits are capped at $6,000 per vehicle (see the chart below).
• If you purchase a qualifying hybrid vehicle, you can receive a tax credit for purchasing the vehicle, as well as for the conversion to plug-in electric vehicle.
• Incentives for high efficiency hybrid vehicles (minimum 40 mpg) are reduced in 2012 and 2013, and are eliminated after that.
• Tax credits for low fuel efficiency hybrids (30 – 39.9 mpg) will be eliminated as of January 1, 2010.
• Rebates are available to non-profit and government entities.
• The total amount of any Federal tax credits or other incentives combined with the state tax credit cannot exceed the consumer’s actual cost of the conversion or the difference between the actual cost and the cost of a similar traditional fueled vehicle.

Which vehicles qualify?

	2010 credit	2011 credit	2012 credit	2013 credit	2014 credit	2015 credit
Plug-in hybrid electric (PHEV), PHEV conversion, electric vehicles (EV), EV conversion, hydrogen.  Credits capped at $6,000.	85%	85%	75%	35%	35%	35%
Light-duty passenger vehicle diesel-electric hybrid. Credits capped at $6,000.	65%	65%	45%	25%	15%	15%
Light-duty passenger vehicle, light-duty truck, medium-duty truck diesel-electric hybrid conversions that increase fuel efficiency of the original vehicle by 40% or more, medium duty truck electric hybrids that achieve 30% improved fuel economy compared to similar non-hybrid models Credits capped at $6,000..	75%	75%	55%	35%	25%	25%
Light-duty passenger vehicle, light-duty truck, medium-duty truck compressed natural gas conversions that have been approved by the U.S. Environmental Protection Agency, compressed natural gas vehicles.	75%	75%	55%	35%	25%	25%
EPA SmartWay approved idle reduction technologies. Credits capped at $6,000..	25%	25%	25%	25%	25%	25%
Highly efficient hybrids (minimum 40 mpg). Credits capped at $6,000.	75%	75%	10%	10%	0%	0%
Mildly efficient hybrids (30 to 39.9 mpg). Credits capped at $6,000..	50%	50%	0%	0%	0%	0%