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Fuel's Gold

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The tax credits and rebates range from 30 percent to 50 percent of the purchase price of the vehicles, depending on the emissions and whether the vehicle can also run on gasoline.

A $25,000 F-150 equipped with a bi-fuel system would receive a 40 percent tax credit or a grant worth $10,000 plus the amount equal to the cost to add the alternative-fuel system -- or around $7,000. This brings the total state rebate to $17,000. In addition, no sales tax would be paid.

There are a few drawbacks to the program. The state only has about $4 million a year available for grants, so most participants will get their refunds in the form of tax credits, which can be collected as refunds on state income taxes.

Heavy demand is pushing back delivery dates for most vehicles into next year. Honda Cars of Mesa, for example, is taking orders for 2001 natural-gas-powered Civics that would not be delivered until March, Polick says.

Prospective buyers must make a 10 percent cash down payment on the full price of the vehicle, even if delivery is months away. Vehicles delivered after January 1, 2001, won't be eligible to receive income-tax credits until 2002. Therefore, buyers of these vehicles must be able to pay the full purchase price of the vehicle and be willing to wait about a year before receiving the state funds.

Any credits and rebates received from the state are considered taxable income.

Even with a few disincentives, it's hard to pass up a deal in which the state will pay up to 70 percent of the cost of a new car or truck.

"Any way you look at it, you're saving money," says Berge Ford salesman Noble.



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John Dougherty
Contact: John Dougherty