Colorado Extends $6,000 Plug-in Vehicle Credit Through 2021

By · May 16, 2013

Innovative Motor Vehicle Income Tax Credit

Colorado Governor John Hickenlooper Wednesday signed into law a pair of bills relating to plug-in and other alternative fuel vehicles, including a measure to extend a plug-in vehicle tax credit into the next decade. The "Innovative Motor Vehicle Income Tax Credit" (HB1247) passed the Colorado House last week by a 40-21 margin, and will extend Colorado's existing incentive program—which provides up to a $6,000 tax credit toward the purchase of a new plug-in and as much as $7,500 toward a conversion—until 2021.

Joining HB1247 on the governor's desk was the "Special Fuel Tax & Electric Vehicle Fee" (PDF), which established a special tax on electric vehicle registration that has also won the support of EV advocates in the state. The measure is a favorable compromise for plug-in owners after Colorado recently joined a number of other states in seeking to recover lost gas tax revenue from EVs. Where other states are considering fees in excess of $100, or per-mile systems that could be even more expensive to drivers, Colorado adopted a flat $50 annual fee—$20 of which will go toward a fund supporting charging infrastructure.

Unlike other state-level EV incentives, like those in California and Hawaii, Colorado will not cap the number of credits it awards before 2021. This means that unless the state legislature takes action to end the program early, it will be open to as many residents as demand plug-ins in the state.

Colorado Among the Most EV-Friendly States

"With the extension of the alternative fuel programs, we'll see more consumer acceptance and more alternative fueled vehicles on Colorado roadways," said Paul Guzyk of Boulder Hybrid Conversions, in an interview with "It's great to see Colorado out in front of other so-called green states." Guzyk previously co-founded 3Prong Power, a plug-in conversion business in Berkeley, Calif., before moving to Colorado, where conversion incentives allow his new business to convert Priuses at a fraction of the cost to consumers.

Earlier yesterday, the Southwest Energy Efficiency Project (SWEEP) released a state government report card that awarded Colorado the top grade in the region for its support of electric vehicles. The state received an A- rating, thanks to twelve policies supporting electric vehicle adoption, including the bills signed into law today.

Colorado's incentives were already "among the most generous in the nation" according to SWEEP, but the $6,000 tax credit had been scheduled to expire in 2015. The extension, coupled with a compromise on annual EV fees, will help the state to continue to its aggressive support EV adoption for years to come.


· · 5 years ago

Yet dealership organisations managed to get Colorado franchise law changed all the way back in 2010 prohibiting EV makers (notably Tesla of course) from selling their vehicles without using franchised dealerships, even in the absence of existing franchised dealership that might face "unfair"competition.

Most EV friendly state? Hardly as long as it forces EV makers into a retail model that was tailor made for the ICE vehicle business model.

· · 5 years ago

Hmmm ... yet Telsa still sells a large number of cars in Colorado. Are they all done through the Park Meadows "dealership". I put "dealership" in quotes because it's basically shop in a mall that shows the car (but no test drives). If you want to order one you still have to go on-line, and of course there is no service offered there.

· · 5 years ago

Reading the details of the bill it appears to be a win for purchasers of BEVs and for PHEVs such as the Volt. I say "appears" - as always wait for the updated Tax publication to get the actual numbers.

For BEVs the new calculation factors in the car's MSRP and the kWh capacity of the battery. In most cases this increases the credit for the car. Both previous and new credits were capped at $6k. But while 2012 LEAFs received a credit of $4815 regardless of MSRP, LEAFs bought in 2013 will in most cases get more, and many will hit the $6k cap. Of course, Tesla was already maxed at $6k, but BEVs with high MSRP like the Focus Electric will now also hit that cap.

For PHEVs it's even better. Colorado had been phasing out credits for hybrids for some time now - barely any credit is left in 2013 - and PHEVs got caught in that. The Volt, for example, went from $6k credit to NO credit when Tax Publication 67 was re-issued last December. Now the Volt credit is restored.

Additional good news for buying used EVs from out-of-state. Colorado won't give the credit twice to the same car, but will award the credit to a used EV that didn't have the credit previously claimed. Previously used credits were a percentage of the original credit, now used credits are based on what is paid for the used car - this will almost always yield a higher tax credit, and in some cases could reach the $6k cap.

Alas, the bad news is for leases. The new calculation cuts the credit for leases substantially from what it was.

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