My wife just did our state taxes and we got $2500+ from the state on our HCHII in Colorado. Lexus owners get something like $6000! I'm not sure how many states have a hybrid deduction but look into it just in case it's not easily found using your preparation method of choice.

Between the $2100 Federal and the $2500 state, we've already MORE than paid for the difference between the HCHII and a gas model--and getting 50mpg will only make the difference greater!

Mods, I wasn't sure if this should go in the tax board so feel free to move the post--I put it here for increased visibility.

Connecticut exempts hybrids from sales tax, which would have been ~$1400 in my case. Not a bad deal!

Illinois sucks.

To any West Virginia hybrid owners: You must paper file and add form WVAFV-1 to your return. The state credit will be pro-rated over 3 years. The form is poorly written, but not completely impossible to figure out. The credit amount is equal to the difference of the hybrid and "equivalent" non-hybrid version of the same vehicle. For the Civic, I used the LX model for the comparison, as the EX has options not available on the hybrid. Hopefully, the form will be improved for 2007!

Also don't forget to include the sales tax (if paid) on your federal return.

would i be exempt from sales tax if i bought a hybrid in CT even if i wasn't a resident there?

Yes, but you'll pay your state's sales tax when you register your car there.

JeffD