BOULDER, Colo. (CBS4) – There are questions about tax credits for hybrid vehicles after a man from Boulder County tried to cash in on his new Prius. Toyota got the money instead.

It involves a couple thousand dollars. Colorado has this alternative fuel tax credit for people who buy hybrids. The key word is “buy.”

Paul Beck loved the Prius — his only dilemma was to buy it, or lease it. He knew with a hybrid there was a tax credit. He asked his salesman at Boulder Toyota about it.

“He said that with Toyota it was easy because the tax credit goes wherever the car goes,” Paul Beck said.

So Beck leased. He filed his 2010 tax return and got a $2,300 tax credit.

“Two weeks ago I got a letter from the state of Colorado Department of Revenue stating that my tax credit had been declined because it was already being claimed,” Beck said.

It was claimed by Toyota Financial Services, the legal owner of the car. Immediately Beck went to meet with his salesman.

“Saw my sales person and his jaw dropped,” Beck said.

The general manager at Boulder Toyota he is “aware of the situation” and is “investigating.” He said he encourages customers to “do their own due diligence regarding tax credits.” He then referred CBS4 to Toyota Financial Service.

“We, as the owner, apply for the tax credit,” a Toyota official said. “Our dealers are regularly updated on our policies.”

None of it settles well with Beck. He now owes the state $2,389. He said Boulder Toyota has lost a customer.

According to the state department of revenue there was $11.3 million in alternative fuel tax credits in 2010. A majority of the money was paid to consumers, not lease companies.

“I believe that the intent was that the consumer get the credit,” said Rep. Spencer Swalm, R-House District 37

“If you’re going to be promised any kind of money back, rebate, whatever it is, make sure you get it in writing,” Beck said.

There are some lease companies that do pass on that tax credit to the customer.

Comments (11)
  1. Molly says:

    I am dealing with this situation as well and also leased my Prius from Boulder Toyota. The tax credit was a selling point they used to get us into the car. We were also contacted by Colorado Department of Revenue saying the credit had been claimed. We figured there must have been some misunderstanding and tried contacting the sales representative multiple times, and he never got back to us. Finally we spoke with the manager, and he told us there was nothing he could do and to take it up with Toyota. Although my Prius has been great, this situation has been handled so horribly by Boulder Toyota and the manufacturer, and I will not be doing business with them again.

  2. Aaron says:

    Am dealing with the same situation also. Was told by the dealership (Stevinson Toyota East) that I would get the credit, then low and behold I don’t. When I told Toyota Financial the spirit of the law was obviously to get customers to purchase these vehicles and not give multi-billion dollar companies tax breaks, they said “we are allowed to take it, it seems you understand that, so I’m not sure what the problem is.”

  3. Kelly says:

    Ah! Burt Toyota is falsely advertising as well – just got a letter saying we owe $3700 for the tax credit claimed in 2008. Our lease actually expires TODAY (same day as the letter, ah the irony) and we were debating whether to buy it or lease again from Toyota — I think they just lost a customer as well.

  4. Don says:

    Same situation with Stapp Interstate Toyota in Denver. I talked to the sales manager who signed my lease agreement shortly after I received my State letter. He revelaed over the phone that he knew about the policy that Toyota would be claiming the credit on all leases of hybrids. When I asked the salesman and sales manager during the lease negotiations if I could claim the credit they did not reveal this to me. Nor did they reveal that I could have requested the right to claim the credit from Toyota. This would have made a difference during the negotiation. I own several Lexus and Toyota vehicles but no more; they have lost my business.

  5. Petra Spiess says:

    We have the same problem with Go Araphahoe Toyota in Centennial. We leased a 2010 Prius in Dec and specificialy asked the financial person if we would be able to claim the alternative fuel tax credit and we were told, yes, we could. Claimed the prorated amount per the state’s instructions for calculating it for a leased vehicle (in our case $780). Got letter denying the credit from the Colorado Dept of Revenue and called Go Araphaoe. Just got off the phone with their financial department who told me it didn’t matter if their people told us we could claim the credit because “they aren’t tax attorneys” and Toyota Financial claimed the credit. Really? It’s THEIR responsibility to properly train their employees. If we had known this it would have factored into our negotations for the car. We are on the verge of purchasing another new vehicle and were considering another Prius or a RAV4 but because of this, Toyota will most likely lose our business as well as the business of our family and friends. Way to go Toyota, hope you enjoy that $780!

  6. Daniel Spiess says:

    After some more effort, Go Toyota on Arapahoe road is fixing the problem. In their defense it was a problem Toyota financial created, but they stepped up to do the right thing. They’ve kept me as a customer.

  7. Ed Knafelc says:

    I had the same problem with my tax credit for my Prius. Got the same letter from Dept. of Revenue. But, I Facebooked my displeasure and situation on GO Toyota’s Facebook page, and an immediate response occurred. After submitting my letter from the state to GO, they reimbursed my credit amount within days. I am looking to get another Prius V from them for sure.

  8. Chuck Gartrell says:

    I am currently dealing with Larry Miller Toyota of Boulder and both the sales manager and general manager have told me they don’t want to do anything to help fix the issue. I was told multiple times by the salesman and the financial manager who did the paper work that I would get the credit regardless of leasing or buying. The Colorado Department of Revenue is also charging me $153 in penalties and interest charging me with being “delinquent” with a “Final Notice” I got two weeks ago. This is a case of our legislators making loop holes for multi-million dollar companies to take advantage of consumers.

  9. Mike maharas says:

    I am also a hybrid vehicle owner affected by the DOR effort to recover revenue from the hybrid car tax credit. I applied and received my tax credit for the 2008 tax year. I received a letter December 27, 2011 claiming that the credit I applied for and received was now being revoked. The credit was a huge reason for leasing my vehicle from Boulder Toyota, and was informed that this was a standard tax credit that I could receive even if I leased.

    The troubling thing is that I have always read the fine print as well as my accountant, and in 2008 no information was disclosed or provided that Toyota would file for this tax credit, or that it could be revoked 2-3 years down the road.

    I thought all automotive purchases required the dealer to disclose if they will be retaining all rebates and in this special case tax credits, none of which I signed to forfeit.

    Please be aware that I intend to fight this Delayed tax ruling that not only requires repayment, but fees and interest to be applied to a consumer that was supporting an early adoption of an alternative fueled vehicle which this tax credit was meant to support.

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