Colorado is changing its EV tax-credit structure, and that might be good news for EV shoppers.
The Rocky Mountain state is switching from a system that previously used a formula to determine how large a tax credit should be on a purchased EV. Now, Colorado is moving to a flat tax credit of $5,000. That can be paired with the federal tax credit of $7,500.
Additionally, the tax credit can be signed over to a dealership or finance company at the time of EV purchase. This means that dealers can effectively “trade” the credit for $5,000 off of the manufacturer’s suggested retail price, meaning that the consumer can get his or her money back at the time of sale, instead of waiting for the next tax return.
The legislation, officially known as House Bill 1332, put Colorado on par with California when it comes to tax incentives for buying an EV. According to the Southwest Energy Efficiency Project, or SWEEP, the law is the “best EV tax incentive in the nation.”
The $5,000 taken off of the price of an electric-vehicle at the time of sale and the potential to save $12,500 overall could lead consumers to shop for more EVs, thus providing a boost to EV sales in Colorado. A simpler tax-credit structure is likely to be helpful, too.