Lexus RX 400h Luxury Hybrid Vehicle Is Eligible for up to $2,000 Tax Deduction

“Lexus RX 400h purchasers can use or take this certification to their individual tax advisors to determine how they can take full advantage of this important federal tax benefit,” said Bob Carter, Lexus group vice president and general manager.

Under the Working Families Relief Act of 2004, the clean-burning fuel deduction is limited to up to $2,000 for certified vehicles first put into service in 2005 and $500 for vehicles placed in service in 2006. Currently, no tax deduction will be allowed by the IRS after 2006.

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. In a May 5, 2005 statement, the IRS stated that, “By combining electric motors with a gasoline engine, hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.”

This one-time deduction is for purchasers only and must be taken in the year the vehicle is put into service. The IRS does not allow the deduction for lessees. The taxpayer must be the original owner and individuals do not have to itemize deductions on their tax return to claim this deduction. This benefit can be taken as an adjustment to income on the 1040 Form.

In addition, many states offer additional tax incentives for hybrid vehicles. RX 400h purchasers are encouraged to check with their tax preparer or financial consultant for specific information regarding possible state tax incentives.

As automakers rush to bring more environmentally responsible products to market, one thing is clear, not all hybrid-electric vehicles are created equal. For example, the Lexus RX 400h hybrid powertrain adds high-performance to the traditional hybrid advantages of improved fuel economy and low emissions, and it was developed to meet the load-carrying and performance requirements of a sport utility vehicle. Importantly, the RX 400h hybrid is rated a Super Ultra Low Emissions Vehicle (SULEV) is one of the most-stringent emissions ratings in the industry and the reason it qualifies for a clean-burning fuel tax deduction. For a further reduction of harmful gases, the RX 400h is equipped with a unique exhaust system that absorbs hydrocarbons emitted when the engine is first started with a cold catalytic converter. After the catalyst has a chance to warm up, the hydrocarbons are slowly purified.

The RX 400h delivers a combined horsepower of 268, matching the performance of a V8-powered luxury SUV while delivering a combined EPA fuel economy rating of 29 mpg, which is slightly better than the average for a four-cylinder compact sedan and more than a 100 percent improvement compared to V8 SUVs. Even more impressive is how quickly and powerfully torque is delivered during mid-range acceleration. The RX 400h’s electric motors are capable of delivering maximum torque, immediately upon demand. This unique power delivery characteristic is most noticeable and most useful during the frequent 30-50 mile-per-hour passing and merging maneuvers.

Lexus has designed its hybrid system to make its operation feel seamless to the driver. The hybrid system works by employing two power sources, a 3.3-liter V6 gasoline engine and a pair of electric-drive motors. It then creates and maintains total synergy between the gas engine and electric motors under all driving conditions. The batteries which power the electric motors never require external charging because recharging is generated internally. Hybrids typically get higher mileage in stop-and-start city traffic than they do on the open road, and the RX 400h is no exception with an EPA city rating of 31 mpg and a highway rating of 27 mpg.

The key component for coordinating low emissions and higher fuel efficiency is the proprietary Lexus Hybrid System, which lets the RX 400h operate on either electricity, gasoline or a combination of both. No competitive luxury hybrid vehicle can achieve this level of powertrain versatility.

Credit: Lexus USA