Alternative Motor Vehicles Tax Credit: You can claim a credit for the purchase of a new motor vehicle that runs on an alternative fuel or for the conversion of a traditionally fueled motor vehicle to an alternatively fueled motor vehicle. Alternative fuel types include compressed natural gas, liquefied natural gas, liquefied petroleum, methanol, ethanol, coal-derived liquid fuels, electricity, solar energy and fuel mixtures containing at least 85 percent alcohol. The tax department includes hybrids in this tax credit.
The credit may not exceed the actual cost of converting the vehicle, the actual cost of retrofitting the vehicle or the difference between the cost of the new alternative-fuel motor vehicle and the cost of a comparably equipped vehicle that uses traditional fuel. However, in no event may the maximum total credit allowed exceed the following amounts:

A taxpayer who is otherwise entitled to a credit for a vehicle that operates exclusively on electricity is entitled to an additional credit of 10 percent provided the incremental credit does not exceed the actual incremental cost for the alternative-fueled motor vehicle. The credit is claimed against up to 100 percent of the taxpayer's annual liability for State income taxes (i.e., Corporation Net Income Tax or Personal Income Tax). A maximum of five vehicles per taxpayer may qualify for credit in any one year. The credit allowance is pro-rated over a period of three years at a rate of 1/3 per year. There are no tax credit carry-overs beyond this three-year period. Excess credits are forfeited. The credit may not be claimed by any taxpayer under any federal or state obligation to convert to alternative-fuel vehicles. The credit is set to expire on June 5, 2006.
Print out the necessary tax form (WF/AFMV-1) here: http://www.state.wv.us/taxrev/uploads/wvafmv%2D1.pdf
For more information see: http://www.state.wv.us/taxdiv/
The rule asks for the taxpayer to calculate the cost difference between a conventional and the hybrid vehicle purchased. However, for the Toyota Prius and Honda Insight, no such conventional vehicle exists. A representative at the West Virginia Department of Environmental Protection suggests that taxpayers look to Colorado’s similar tax credit program that establishing an incremental price differential for all of the common hybrids for Colorado taxpayers to use in their calculations. When you fill out your tax form, print a copy of the Colorado tax info (found here: http://www.revenue.state.co.us/fyi/html/income09.html) and attach a note explaining your rationale. Since Colorado has established an incremental price difference of $4040 for the 2005 Prius, a West Virginia resident using the same strategy for a 2005 model could claim the full $3750 available West Virginia tax credit.