Missouri May Give $1,500 to Those Who Buy Hybrids

Missouri Governor Matt Blunt wants to offer $1,500 in tax deductions to anyone who buys a hybrid car. Governor Blunt wants also wants to encourage the use of E85 through tax credits. Owners of gas stations who install E85 pumps will get a tax credit. And a quarter a gallon tax credit would be given to anyone who buys it.

Missouri has considered passing a tax credit for hybrid cars before, but has had trouble passing it into law.

According to the press release Governor Blunt wants to offer the tax deductions to Missourians who purchase qualified hybrid vehicles. The tax deduction would be equal to the lesser of $1,500 or 10 percent of the purchase of the vehicle.

According to the Governor, only 92 of the 4,312 gas stations in Missouri offer E85. It can cost up to $40,000 for a gas station to replace or upgrade its pumps and fuel tanks to sell E85.

Source: MyFox Kansas City | Blunt Initiative Includes Tax Deduction For Hybrid Vehicles

E-85 is already a lot lower than regular gasoline, which is selling for nearly $3 a gallon. A quarter per gallon rebate doesn't sound like much, but it lowers the price of ethanol nearly 80 cents a gallon. In an SUV with a 25 gallon tank, that saves 20 bucks per fill up.

The 25 cents per gallon would be offered in the first year, 20 cents per gallon the second year and 15 cents per gallon would be offered in the third year, with a maximum of $500 per taxpayer per year. Tax credits would be claimed using the income tax return.