Thursday, February 02, 2006

Hybrids are great for tax breaks in Utah .... except the Toyota Prius

I have many clients to whom I have suggested that purchasing a hybrid vehicle would generate a nice Federal deduction and a State of Utah tax credit. The Federal deduction is working as it should. The State of Utah however has written the credit so that only one car on the market is excluded -- a Toyota Prius. It just so happens that a client of mine went out and bought a Prius based partly on my advice regarding hybrid vehicles, and because somehow the legislature specifically excluded that one vehicle (for no possible logical reason other that making a trap regarding this credit) my client will only get half the tax benefit he was counting on.

Steve Urquhart, if you are out there could you tell me why has this credit included such a ridiculous provision as excluding a vehicle based solely on the fact that the manfacturer didn't choose to make a non-hybrid version. It is highly discriminatory to disallow a tax benefit to a taxpayer that would otherwise qualify, based solely on the type of vehicle. This loophole is like disallowing the child tax credit because the childs first name starts with the letter P.

I guess this situation would argue in favor of the flat tax. The state can't insert nonsensical provisions into its tax code that hurt taxpayers that get caught in their web.

I must admit that I deserve the blame -- a little more research would have saved me from this situation

To my other readers, hybrid vehicles are great for tax write-off's I just hope you avoided the Prius.