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-Updated February 5, 2007- There are many incentives designed to encourage the use of alternative fuel vehicles (AFVs) and this page highlights some of the most useful for those looking to purchase or lease an AFV. The views expressed by outside organizations are not necessarily the views of the City of Los Angeles or the Environmental Affairs Department. Links are provided as a service for visitors to the City's website. For the most up to date information go to the California Air Resources Board site at http://www.driveclean.ca.gov/en/gv/incentives/index.asp or the U.S. Department of Energy site at http://www.fueleconomy.gov/feg/tax_afv.shtml . This page is organized by vehicle type: Compressed Natural Gas, Electric, and Hybrid Electric Vehicles. General information is also provided as well as website links with additional information. GENERAL NOTE: The California Department of Motor Vehicles (DMV) High Occupancy Vehicle (HOV) lane access stickers for qualifying hybrid vehicles have all been issued. However, the sticker accompanies the vehicle. The purchaser of a used hybrid vehicle should look for the DMV HOV lane access sticker as the carpool benefits transfer with the vehicle. DMV HOV lane access stickers are still available for other clean alternative fuel vehicles. Compressed Natural Gas (CNG) Vehicles Federal
Income Tax Deduction/Credit: There
is a one time federal income tax deduction of up to $2,000 for the purchase of CNG vehicles through 2005. Starting January 1, 2006, tax credits, not
tax deductions, have become available for alternative fuel vehicles. The
credit is available on the purchase of light-, medium-, and heavy-duty vehicles
that run on natural gas and hydrogen. This includes fuel cell and hybrid
versions of these vehicles. Light-duty lean burn diesel vehicles are also eligible.
These tax credits are applicable for new vehicles and some natural gas
conversions. Tax credits range
between a
maximum of $5,000 for vehicles with an 8,500 gross vehicle weight ratio (GVWR)
or lighter and up to $40,000 for vehicles with a GVWR in excess of 26,001 pounds.
The credit is effective for natural gas vehicles placed into service after December 31, 2005 and purchased on
or before December 31, 2010. For a summary of recent incentives go to:
State Rebates: None are known to be currently available. Check the California Air Resources Board (CARB) website at http://www.driveclean.ca.gov/en/gv/incentives/index.asp and enter alternative fuel vehicles, with no zip code, for any updates. Driving Solo in California's Carpool Lane: Certain CNG vehicles and other clean alternative fuel vehicles are allowed to operate in California's carpool lanes with only one passenger. To qualify, the vehicle must display Department of Motor Vehicles (DMV) High Occupancy Vehicle (HOV) lane access stickers. Please note that the A list of qualifying vehicles and a link to the DMV form needed to get the stickers can be found on the web at www.arb.ca.gov/msprog/carpool/carpool.htm or more information may be obtained by calling the CARB Motor Vehicle Information Hotline at (800) 242-4450. Free Parking at City Meters: Based on a program approved through January 1, 2008, selected clean vehicles powered by CNG, electricity, hydrogen and hybrids are allowed to park at City of Los Angeles parking meters for free. To qualify, the vehicle must display a DMV HOV lane access sticker. See the above link for information on qualifying vehicles. Please note that all other parking restrictions - including posted time limits, no parking during street cleaning times, and peak hour tow away periods - must be obeyed. You may also want to call LADOT’s Bureau of Parking Regulations and Special Operations at 213- 485-2466 for more information. Federal Income Tax Deduction: For 2005, there is a federal income tax credit of up to $4,000 for the purchase or lease of fully electric vehicles. However, this incentive reduces to $1,000 in 2006 and ends at the close of 2006. For more information go to: http://www.fueleconomy.gov/feg/tax_afv.shtml#ev. The required Internal Revenue Service (IRS) form 8834 "Qualified Electric Vehicle Credit" can be found at the above link or at: http://www.irs.gov/pub/irs-pdf/f8834.pdf. Please speak to an accountant or tax professional to verify amount and requirements before claiming the deduction. For the most up-to-date general information on tax incentives please visit the U.S. Department of Energy's site at: http://www.fueleconomy.gov/feg/tax_afv.shtml. State Incentives and Local Utility Rate Reduction: The CARB does not offer a consumer incentive for purchasing a neighborhood electric vehicle (NEV), as explained further at: http://www.driveclean.ca.gov/en/gv/faq/index.asp#6. For any updates and further information go to http://www.driveclean.ca.gov/en/gv/incentives/index.asp and enter electric vehicle type, with no zip code. The Los Angeles Department of Water and Power (LADWP) does offer technical assistance with an electric charger installation and also offers a reduced rate for time of use at those chargers in the LADWP service area. You can visit their site at http://www.ladwp.com/ladwp/cms/ladwp002056.jsp for more information or call them by phone at 800-GREEN LA (800- 473-3652). If you would like to see the public electric vehicle (EV) charging stations available in your area, use the links located at: http://www.ladwp.com/ladwp/cms/ladwp000791.jsp. Driving Solo in California's Carpool Lane: Certain EVs (that are allowed to go on the freeway) can operate in California's carpool lanes with only one passenger. To qualify, the vehicle must display Department of Motor Vehicles (DMV) High Occupancy Vehicle (HOV) lane access stickers. A list of qualifying vehicles and a link to the DMV form needed to get the stickers can be found on the web at www.arb.ca.gov/msprog/carpool/carpool.htm or by calling the CARB Motor Vehicle Information Hotline at (800) 242-4450. Free Parking at City Meters: Based on a program approved through January 1, 2008, selected clean vehicles powered by electricity, CNG, hydrogen and hybrids are allowed to park at City of Los Angeles parking meters for the posted time limit for free. To qualify, the vehicle must display DMV HOV lane access stickers, (see above). At the Los Angeles International Airport, free parking is available for electric vehicles only at charging stations located in the lower/arrivals level of Parking Structures 1 and 6. No free parking is provided for clean and natural gas-fueled vehicles or bi-fuel vehicles in the Central Terminal Area parking structures or economy lots. It should be noted that all other parking restrictions - including posted time limits, no parking during street cleaning times, and peak hour tow away periods - must be obeyed. Federal Income Tax Benefit: Hybrid vehicles identified by the U.S. Department of Energy at http://www.fueleconomy.gov/feg/tax_hybrid.shtml may be eligible for a "clean fuel" deduction of $2,000 for those placed in service by the end of 2005. If the vehicle was purchased before 2005, one can claim the deduction by filing an amended tax return for the tax year in which the vehicle was purchased. The amount of the benefit depends on the particular hybrid automobile being purchased. Starting January 1, 2006, tax credits and not tax deductions have become available for alternative fuel vehicles. These federal government issued IRS tax credits are capped at a set maximum credit amount. The IRS tax credits range between $250 to $3,150. The official IRS release about hybrid benefits can be found at IRS link to hybrid vehicle benefits or you may call the IRS at 202-622-4000 for more recent information. Please speak to an accountant or tax professional to verify amount and requirements before claiming the deduction or tax credit. For more general information on tax incentives please visit the U.S. Department of Energy's site at: http://www.fueleconomy.gov/feg/tax_afv.shtml#cleanfuel . State Rebate: There are currently no known State-wide incentives for electric hybrid vehicle purchases or leases. For any updates and further information go to http://www.driveclean.ca.gov/en/gv/incentives/index.asp and enter hybrid as the vehicle type, with no zip code. Please note: There is a State program that allows certain vehicles to operate in the carpool lane with one passenger; however, it does not apply to all hybrid vehicles. For further information, please see the attached link: http://www.arb.ca.gov/msprog/carpool/carpool.htm. If the State issues a DMV HOV lane access sticker to the hybrid vehicle, it is included in the City's Program that allows free parking at City Meters. The California Department of Motor Vehicles (DMV) High Occupancy Vehicle (HOV) lane access stickers for qualifying hybrid vehicles have all been issued. However, the sticker accompanies the vehicle. The purchaser of a used hybrid vehicle should look for the DMV HOV lane access sticker as the carpool benefits transfer with the vehicle. It should be noted that all other parking restrictions - including posted time limits, no parking during street cleaning times, and peak hour tow away periods - must be obeyed. Fuel Cell Vehicles
Federal Fuel Cell Motor Vehicle Tax Credit: Section 1341 of the
Energy Policy Act of 2005 provides a base tax credit of $8,000 for the purchaser
light-duty fuel cell vehicles (<8,501 lb GVWR). The $8,000 credit is valid
until December 31, 2009. After that, the credit is $4,000. To qualify, the
vehicles must meet very stringent emission levels. Alternative Fuel Vehicle (AFV) License Fee: In order to equalize the vehicle license fee between the conventional fuel vehicle and the more expensive AFV, the cost difference of the purchase of an AFV is exempt from the vehicle license fee (of 2%) when it costs more than the most comparable conventional fuel vehicle, as determined by the California Energy Commission. This reduction applies towards new, light-duty AFVs that are certified to meet or exceed ultra low emission vehicle (ULEV) standards. This program runs from January 1, 1999 to January 1, 2009. (Reference California Revenue and Taxation Code Section 10759.5)
Employer Cash Incentives are Taxable U.S. Department of Energy Vehicle Buyers Guide U.S. Department of Energy: www.fueleconomy.gov/ For more information on EAD's Air Quality Division, click on the AQD homepage here, or to return to the Environmental Affairs Department's homepage, click EAD homepage.
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