Nov 18 2005
The Internal Revenue Service (IRS) has certified Ford Motor Company's hybrid SUVs as being eligible for the clean-burning fuel deduction. The certification means that customers buying either a model year 2006 Ford Escape Hybrid or Mercury Mariner Hybrid during calendar year 2005 may claim a tax deduction of up to $2,000 on Form 1040.
The Escape and Mariner Hybrids join a select list of vehicles certified by the IRS. The 2005 Ford Escape Hybrid has already been on the list of clean-fuel vehicles. Along with Ford and Mercury, the list only includes six other vehicles from Lexus, Toyota and Honda.
"Federal law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel," according to the IRS. "By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines."
The amount of the deduction for the Ford Escape Hybrid and the Mercury Mariner Hybrid was set after Ford documented for the IRS the incremental cost related to the vehicles' electric motor and related equipment.
The deduction is a one-time deduction and must be taken in the year the vehicle is originally used and must be taken by the original owner. The deduction does not apply to leased vehicles.
Even if a taxpayer does not itemize deductions, the Escape or Mariner hybrid can still qualify as an adjustment to income on Form 1040.
Since the hybrid tax incentive is a deduction, the actual amount of savings depends on such factors as the individual's tax bracket.
The deduction for the purchase of a hybrid vehicle expires on December 31, 2005 under Section 1348 of the Energy Act of 2005. The deduction has been replaced by a tax credit starting in 2006.
Presently, Ford produces about 24,000 hybrid vehicles annually and is the only American automaker to produce hybrids.
As CEO and chairman Bill Ford announced last September, the company plans to have five hybrids on the road by 2008. Joining the Escape and Mariner will be hybrid versions of the Ford Fusion, Mercury Milan and Mazda Tribute. By 2010, Ford plans to increase hybrid production to approximately 250,000 vehicles annually.
While Ford produces hybrid vehicles, the company continues to research fuel-efficient innovations in other areas. As Bill Ford said, "We are the only auto company doing serious development work with all four fuel technologies: clean diesel, gasoline-electric hybrids, hydrogen-powered internal combustion engines and hydrogen fuel cells."
http://www.ford.com/