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Report: GM to get $14 billion domestic tax break

Filed under: Government/Legal, GM

General Motors Tax Break It looks like General Motors will be able to skip out on around $14 billion worth of taxes domestically and another $19 billion in taxes overseas thanks to a deal with the U.S. government. According to Edmunds, 2010 will mark the first year since 2004 that the company has operated in the black, and while most companies are made to pay taxes on their revenue, GM will be able to skip its tax tab due to years of massive losses. Companies are typically forgiven a portion of future taxes due to their past losses, but that benefit is typically stripped after an organization goes through bankruptcy.

That’s not the case with GM, however. For reasons that aren’t entirely clear, The General has managed to hang on to its tax breaks despite shedding around $30 billion in debt during bankruptcy proceedings. According to CNN Money, both GM and the Treasury Department deny that the automaker has received any special deal, though Edmunds reports that GM may have gotten the break to help reduce the perceived cost of the auto industry bailout.

[Sources: Edmunds, CNN Money]

Report: GM to get $14 billion domestic tax break originally appeared on Autoblog on Wed, 23 Feb 2011 18:30:00 EST. Please see our terms for use of feeds.

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Report: $33M in EV tax credits went to buy unqualified vehicles

Filed under: Car Buying, Government/Legal

Is a bicycle an electric vehicle? How about a Hummer H3? These are some of the things that Americans claimed were hybrids, alternative-powered or plug-in electric vehicles on their tax forms, reports USA Today. What’s more, the false claimants managed to get $33 million back from the federal government. According to the daily, $33 million is about 20 percent of the $163.9 million total that has been claimed under the tax credit programs so far.

The information comes from a new report, published by the Treasury Inspector General for Tax Administration (read the full report in PDF), which found that the problem lies with the IRS, which apparently doesn’t have the “adequate procedures” required to ferret out which claims qualify and which don’t. The IRS responded by saying it, “has already implemented measures to address some of the problems highlighted in the report.” Okay, that’s all somewhat understandable, but a getting money back for a bicycle? We love bikes, seriously, but we’re pretty sure that they’re not cars…

[Source: USA Today | Image: General Motors]

Report: $33M in EV tax credits went to buy unqualified vehicles originally appeared on Autoblog on Fri, 04 Feb 2011 18:28:00 EST. Please see our terms for use of feeds.

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Hyundai Sonata Hybrid delay means no $1,300 tax credit?

Filed under: Car Buying, Hybrid, Sedan, Government/Legal, Hyundai, Earnings/Financials

2011 Hyundai Sonata hybrid

2011 Hyundai Sonata Hybrid – Click above for high-res image gallery

In mid-October, Hyundai announced that its 2011 Sonata Hybrid would be eligible for a $1,300 tax credit. The electrified mid-size sedan was to officially hit the market before the end of the year and the first 60,000 buyers who plopped down some coin for the Sonata Hybrid would’ve walked away with that juicy credit in their pockets. However, there’s a hitch: the Sonata Hybrid has been delayed and its release date pushed back until January, and GreenCarReports.com indicates that that will dash any hopes of receiving the credit, which expires on December 31.

Even so, the Sonata Hybrid still remains one of only a few mid-size hybrid sedans capable of achieving great fuel economy – 36 miles per gallon city and 40 mpg highway – and many of its competitors like the Ford Fusion Hybrid, Toyota Camry Hybrid and Chevrolet Malibu Hybrid either no longer qualify for the tax credits or aren’t available for purchase. The Sonata Hybrid is a capable car and one of the most compelling new vehicles in the mid-size segment, so missing out on the credit probably won’t affect sales dramatically, but its delay will mean that early adopters won’t have an extra $1,300 in their couch cushions next year.

Gallery: 2011 Hyundai Sonata Hybrid

[Source: GreenCarReports]

Hyundai Sonata Hybrid delay means no $1,300 tax credit? originally appeared on Autoblog on Fri, 10 Dec 2010 11:31:00 EST. Please see our terms for use of feeds.

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How The Gas Tax Is Under Threat From Green Vehicles

Filed under: Government/Legal, Earnings/Financials

Can Governments Afford To Incentivise Electric Cars?

Exxon Mobile gas station

Live in the right part of California and work for the right company and you might be able to buy the new Nissan Leaf for as little as $12,500, as Autoblog has reported, due to the raft of incentives that are available for buyers of the little battery car and other high-mileage, low-emission products.

In recent years, lawmakers have been racing to come up with incentives designed to encourage motorists to migrate to clean, efficient vehicles. It’s a clearly noble effort, but one that deserves a closer look in an era of fiscal restraint.

Several states are looking at a more direct form of taxation: a per-mile usage fee on battery-based vehicles.

The feds, and most states offering such incentives, have put caps on their zero-emission incentive programs, and most will vanish by mid-decade. But, ironically, if these programs do what they’re intended to, the fiscal impact could be felt for years to come. It turns out that going green could plunge state and federal balance sheets into the red.

The short-term costs are already potentially significant. At the federal level, a $7,500 tax credit could drain billions of dollars a year out of the Treasury if major automakers come even close to their battery car sales targets by mid-decade.

Such cash incentives – along with other perks, such as access to California’s HOV lanes – are designed to motivate the move to vehicles like the Leaf and the new Chevrolet Volt. Once momentum starts building, these givebacks can be phased out, proponents contend. But they’re missing a big part of the picture.

Paul A. Eisenstein is Publisher of TheDetroitBureau.com, and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.

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How The Gas Tax Is Under Threat From Green Vehicles originally appeared on Autoblog on Mon, 06 Dec 2010 16:35:00 EST. Please see our terms for use of feeds.

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