updated 11/20/2006 1:29:25 PM ET 2006-11-20T18:29:25

The Internal Revenue Service has determined that hybrid cars made by Honda Motor Co. and General Motors Corp. are still eligible for a tax credit intended to encourage the purchase of fuel-efficient cars, as the credit phases out for Toyota Motor Corp. and its Lexus division.

The tax credit for hybrid vehicles begins to phase out after a manufacturer has sold 60,000 hybrid or other fuel-efficient vehicles. The IRS said it made the determination on Honda hybrids after reviewing Honda sales for the third quarter 2006.

Honda sold 9,912 hybrids in the quarter ending Sept. 30, bringing the company's total sales of 2006 model hybrids to 28,408. As a result, consumers who purchase a 2006 Honda Accord hybrid can still claim a $1,300 tax credit, while purchasers of a 2006 Honda Civic hybrid can receive a $2,100 tax credit, and purchasers of a Honda Insight can receive a $1,450 credit.

The credits for each model are based on fuel efficiency.

Separately, the IRS said that General Motors hybrid cars also remain eligible for the full tax credit. GM sold 812 hybrids in the quarter ending Sept. 30, the agency said, bringing its total number of hybrids sold to 2,200.

Purchasers of the hybrid Chevrolet Silverado are eligible for credits of up to $650, while the GMC Sierra hybrid is eligible for credits of up to $650, and the 2007 Saturn Vue Green Line is eligible for a credit of $650, the IRS said.

Toyota sold 57,606 hybrids in the third quarter, the IRS said, bringing its total hybrid sales for the first nine months of 2006 to 144,216. The tax credit for Toyota hybrids began to phase out Oct. 1, so purchasers of Toyota hybrids can only claim half the credit until March 31, 2007, and only 25 percent of the credit from April 1, 2007 to Sept. 30. 2007, the IRS said.

The credit for the popular Toyota Prius is $1,575 and will drop to $787.50 on April 1. The credit for the 2007 Toyota Camry hybrid is $1,300 and will be cut in half to $650 on April 1.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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