Maryland Incentives and Tax Credits for Hybrid and Electric Vehicles

Citizens of Maryland may not care that federal tax incentives to purchase an alternative fuel vehicle will be running out at the end of this year; the state of Maryland seems very intent on supplying several incentives of its own. While the need to reduce fossil fuel emissions and overall fossil fuel usage remains fairly high throughout the country, Maryland seems to be one of the few states taking this issue seriously. Perhaps it’s the close proximity to the nation’s capital; perhaps it’s a desire to be an example-setter for the rest of the country; or, maybe the Maryland government simply has an urge to do what is best for its citizens. No matter what the reason, there are still quite a few state incentives for purchasing a hybrid or electric vehicle in Maryland.

The first incentive has been in effect since 2003. It started with Maryland House Bill 61 which exempts qualified vehicles from motor vehicle emissions testing and inspections. Qualified vehicles are defined as achieving a fuel efficiency rating of 50 mpg or better. Currently those qualified vehicles are the first generation Honda Insight (model years 2000-2006) and the Toyota Prius manufactured prior to the 2008 model year. The current law exempts these qualified vehicles until September 30, 2012. After that date, a qualified hybrid vehicle is not required to submit an emissions test and inspection until three years after the date the vehicle is registered in the state.

If you own a plug-in hybrid vehicle, such as the Chevy Volt, you may apply for a permit authorizing you to use the High-Occupancy Vehicle (HOV) lane, regardless of the number of occupants in your vehicle. The state charges no more than $20 for this permit and the program will not expire until September 30, 2013. Plug-in hybrids are not extremely popular in the United States currently, but more models are scheduled to be released in the coming years. GM is scheduled to release a plug-in crossover SUV in 2011, while Ford has a plug-in hybrid Escape scheduled for the 2012 model year. Volvo and Toyota are also looking into joining the ranks in 2012 with a plug-in V70 hybrid and plug-in Prius, respectively. Cadillac and Mitsubishi are also hoping to offer plug-ins but are still in the concept stages.

Of course, if you’d like to get away from the use of fossil fuels altogether, the Maryland government has a nice incentive for you as well. A tax credit took effect of October 1, 2010, for the purchase of a qualified full-electric plug-in vehicle. This credit is not to exceed $2,000, but that’s still a nice chunk of change to take off your state taxes. If you manage to make your purchase before the end of the 2010 year, this credit can be combined with the federal credit of up to $7,500, making for a total savings of $9,500 for purchasing an all-electric. That may not make much of a dent in, say, the $101,500 Tesla Roadster, but it does put a decent-sized chink in the armor of the Nissan Leaf, which has a much more modest starting price of $32,780.

The final incentive is more geographically restrictive, but does help any residents or workers in the city of Baltimore. This is a discount offered on parking within the city to owners of hybrid vehicles. Currently this is limited to 200 vehicles and will only include contracted monthly parking, but there is a waiting list for those who don’t mind having a little patience. A full list of parking garages participating in the program, and the reduced-fee prices for each garage, can be found here: Participating Parking Garages. For any other questions or concerns regarding any of these incentive programs, you can visit the Maryland Department of Transportation’s Administration page at: Maryland Vehicles Administration.

Be sure to also see if the vehicles you’re considering can qualify for a federal tax credit, deduction, or rebate.  Here’s  more info on new car tax credit, hybrid car tax credit, new diesel car tax credit, and electric car tax credit from the federal government.  Also, make sure to check out the list of year-end new car deals, new car lease deals, and certified used car deals being offered by the car makers.  Given the year-end and car manufacturers’ desire to sell more cars, there’s great deals to be had if you do your homework and are aware of all the incentives, discounts, rebates you can qualify for.  Here’s some tips on year-end car buying strategy.

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