Colorado Switches To Single-Rate $5,000 Tax Credit For Electric Cars

2 years ago by Mark Kane 22

Colorado State Capitol

Colorado State Capitol

Nissan LEAF

Nissan LEAF

Thanks to the approval of the SWEEP’s HB 1332 bill, Colorado now has a simple, flat $5,000 credit program available for purchasing an electric car, in place of the previously more complicated system.

Because the credits are now also assignable to a car dealer or finance company, this effectively turns them into a point of sale incentive for consumers – a big plus.

On the negative side, the old program could net a credit of up to $6,000.


SWEEP is Southwest Energy Efficiency Project Public interest org that advances energy efficiency policy in Arizona, Colorado, Nevada, New Mexico, Utah & Wyoming


SWEEP calls this new approach the best in the nation, and soon we will probably see the proof in increased sales.

Colorado Improves Electric Vehicle Incentives with $5,000 Tax Credit

On May 4, the Colorado legislature approved HB 1332, a bill that dramatically improves the state’s alternative fuel vehicle tax credits. It simplifies a complex formula, setting a flat $5,000 credit for the purchase of a light duty electric vehicle (EV). Most importantly, it makes the credits assignable to a car dealer or finance company, which will effectively turn them into a point of sale incentive. This makes the Colorado incentive the best in the nation, combining one of the highest tax credits with a point of sale option, and is expected  to significantly increase EV sales. SWEEP proposed the concept of assignable tax credits and helped build broad support for the legislation.

– Click here for a copy of HB 1332

$5,000 on top of the federal tax credit of $7,500 translates to $12,500 – about a third off the median starting electric car price in America.

source: Autoblog

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22 responses to "Colorado Switches To Single-Rate $5,000 Tax Credit For Electric Cars"

  1. Ground_gainer says:

    It also dropped the max credit by $1000…. 🙁

    Anyone know if the used EV rebate is gone too?

    Sure, point of sale is great but a lower rebate isn’t :-p

    1. Ground_gainer says:

      Used rebate is gone too:
      “Makes all used motor vehicles and trucks ineligible for the
      credits”

    2. Nix says:

      I’ll have to look up actual Colorado tax rates, but a 5000 dollar point-of-sale reduces your taxes, and gives you the money up front instead of having to wait for a refund. So you aren’t losing 1,000 dollars.

      In round numbers, if your local tax rate is 10%, you save $500 in state taxes (the tax rate depends on your individual tax district, so there isn’t one number for all of Colorado).

      If you are getting a 5% return on your stock portfolio, keeping that $5000 invested in stocks will return you around $250 dollars vs. waiting a year to get a tax refund (I know, I’m not compounding, sue me).

      Alternatively, if you have to borrow that money at 5%, you again would save around $250 in interest while you wait for the tax refund.

      So you might be down $250 dollars. Less or more depending upon your tax rates, and interest rates. Not a big deal.

      On the other hand, it totally sucks that the used vehicle tax credit dies. But I completely understand why.

  2. Ground_gainer says:

    At least it doesn’t take effect until next tax year. Was hoping to get the 6k rebate on a Pacifica hybrid.

  3. drpawansharma says:

    Coloradoans will get a Model 3 for 22000$. lucky …..

    1. kdawg says:

      Tesla’s $7,500 tax credit will probably expire before $35k Model 3’s get to Colorado.

      1. przemo_li says:

        Depends on production rates.
        $7,500 do not expire after 200k sales, but after 200k sales and some time after that aligned to quarters of sale for car producer.

        1. kdawg says:

          I don’t expect a bare-bones Model 3 to show up in Colorado until late 2019 at the earliest. If that happens, IEVs has Tesla’s tax credit at the reduced rate of $1,875. If it takes until 2020, which is very possible, the credit is gone.

          http://insideevs.com/when-will-the-7500-us-credit-expire-for-the-tesla-model-3-and-everyone-else/

  4. SparkEV says:

    Does it apply to cars bought outside of CO? There are dealers in OR and MD that sell SparkEV at $19K before subsidy (see autotrader), though not sure about residency to get such discount. If they sell to CO residents for that price, $12.5K off would bring it down to $6.5K! Even if you have to spend $1K on shipping, that’s only $7.5K for a new car.

    It’s too bad this won’t last even if it’s possible since there won’t be any more SparkEV soon…

    1. Ground_gainer says:

      SparkEV,
      Yes it applies to cars purchased out of state. I got my Rav4 EV from Carson Toyota in CA back in May of 2013 and I got the full $6,000 rebate.

  5. Spoonman. says:

    SparkEV, I think that it’s hard to get dealers to get you an EV from out of state. Living in Pennsylvania I have talked to EV dealers in New Jersey and Maryland and they’ve told me they can’t do anything for me.

    1. SparkEV says:

      Not sure about MD dealers, but there are (were?) dealers in CA who sold SparkEV to out of state people. In SparkEV forum, there are guys in KS, FL, even Canada who bought in CA before it was available in Canada. It’s too bad about MD dealers not selling out of state. OR also has good deals, and I wonder if they’ll sell out of state.

  6. Mister G says:

    Wow, this will never happen in FLORIDA..our Governor and legislators are global warming Republicans.

    1. SparkEV says:

      In CA, we have one of the highest state income tax rate. Getting some back via EV rebate is great way to reduce one’s taxes (aka, reducing government). All the Republitards talk of “small government” is nonsense when it’s Dumbocrats who implement tax cut via EV tax credit. Apparently, FL Republitards are more tarded.

  7. Gene says:

    I regard this as an improvement for Colorado tax payers. It should make it much clearer what your rebate will be without having to try to project income ahead of time. Last qualifying electric we bought didn’t give us anywhere near the maximum even though it could have. Our federal taxable income of 70,000 plus didn’t give us the full 7,500, only 5,900. Colorado deducts the full 7,500 from the calculation anyway and you receive an even lower state rebate. Hopefully this will remedy that.

  8. leafowner says:

    Georgia used to be progressive like this — now they TAX EV’s instead of promoting them.

  9. mustang_sallad says:

    Do PHEVs count?

    1. ModernMarvelFan says:

      Yes, based on battery size.

  10. Orygun EV driver says:

    If you lease, it drops from the previous $6K cap to a flat $2,500, so a bigger hit. If you are looking to lease, do it before year end and you’ll get an extra (up to) $4,500.
    A 30 kWh LEAF will currently get you 30% of the portion of the car you pay for – i.e. $35,000 – $7,500 (Tax credit applied to lease) = $27,500. $27,500 – $14,500 (residual value) = $13,000. $13,000 * 30% (30 kWh/100) = $3,900 CO Tax credit.

    It effectively reduces the credit on leases for higher cost/bigger battery vehicles, but raises it for low cost/small battery vehicles. Plug-ins with a small battery like the Ford Energi products will get the full $2500 where before they would get about half that.

    1. RedLeafBlueLeaf says:

      It’s been 3 years since I looked into this in detail, but the current Colorado tax credit is based on the price of the base model for your model year, not *your* MSRP. This is critical, since the S model is so cheap. As a result Colorado LEAF leasees typically got a credit closer to $1k. So this is an improvement.

  11. Tyler Hilliard says:

    PHEVs should NOT get any rebate. That would be an easy way to make the funds last longer and go towards a cleaner fleet.

  12. RedLeafBlueLeaf says:

    The phase-in date is the end of this year. There are a number of used car dealers who have made a business out of importing used EVs – mostly LEAFs – from other states and touting the 24% state tax credit (up to $6k) off of the price – I expect they’ll be emptying their lots of used EV stock by December.

    Hmmm. Might be worth importing a used 30kWh LEAF from out of state in December and claiming the 30% state tax credit.