IRS grants tax credit to VW and Mercedes diesel vehicles

14 August 2008

Mumbai: The Internal Revenue Service (IRS)  has granted a federal alternative-powertrain tax credit to Volkswagen and Mercedes-Benz customers for their diesel-powered vehicles.

Mercedes-Benz says, the credit amount is based on an Internal Revenue Service (IRS) formula that determines how much fuel the diesels will conserve compared with a similar model from 2002.

Both German automakers hope that the tax credit will soften the added cost of buying a vehicle powered by more expensive diesel fuel and a more expensive engine. Although the diesels have a mileage advantage of more than 30 per cent over similar gasoline models, diesel fuel continues to be considerably more expensive than premium gasoline in the US.

Volkswagen make 2009 VW Jetta TDI sedan and Sportwagen qualify for the credit, similarly Mercedes GL320, R320 and ML320 Bluetec are also eligible for the tax credit.

Mercedes-Benz says, the credit amount is based on an Internal Revenue Service (IRS) formula that determines how much fuel the diesels will conserve compared with a similar model from 2002.

The Mercedes diesels have been designated as advanced lean-burn-technology motor vehicles that meet the requirements of the Alternative Motor Vehicle Credit, according to an IRS letter sent to the company.