Phase-Out of Credit for Toyota and Lexus Hybrids Continues With Reporting of First Quarter Sales


Notice: Historical Content

This is an archival or historical document and may not reflect current law, policies or procedures.

IR-2007-96, May 2, 2007

WASHINGTON — After reviewing Toyota Motor Sales USA, Inc.’s, 2007 first quarter sales, the Internal Revenue Service announced that purchasers of Toyota and Lexus vehicles may continue to claim the Alternative Motor Vehicle Credit.   Based on the number of vehicles sold, the phase-out period for Toyota vehicles began on Oct. 1, 2006.


Toyota sold 61,369 qualifying vehicles to retail dealers in the quarter ending March 31, 2007. This brings the cumulative sales of qualified Toyota hybrid vehicles sold from the period of Jan. 1, 2006, through March 31, 2007, to 273,442.

Taxpayers may claim the full amount of the credit up to the end of the first calendar quarter after the quarter in which the manufacturer records its sale of the 60,000th qualified vehicle. For the second and third calendar quarters after the quarter in which the 60,000th vehicle is sold, taxpayers may claim 50 percent of the credit. For the fourth and fifth calendar quarters, taxpayers may claim 25 percent of the credit. No credit is allowed after the fifth quarter. The sale of Toyota’s 60,000th qualified vehicle occurred in the quarter ending June 30, 2006.

The applicable credit amounts are as follows:


Qualifying Vehicle

Full Credit When Purchased By 9/30/06

Reduced Credit When Purchased From 10/1/06 through 3/31/07

Reduced Credit When Purchased From 4/1/07  through 9/30/07

Beginning 10/1/07

05, 06 and 07 Toyota Prius





06 and 07 Toyota Highlander  2WD and 4WD





07 Toyota Camry Hybrid





06 and 07 Lexus RX 400h
2WD and 4WD





07 Lexus GS450h






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