Colorado’s Bold Leap: Imposing New EV Tax Credits

Colorado is leading the way in electric vehicle (EV) incentives with a groundbreaking law that significantly amplifies state tax credits for EV purchases and leases.

On May 11, Governor Jared Polis (D-CO) sanctioned House Bill 23-1272 into law. According to the law, Colorado residents, from July 1, 2023, will be eligible for a robust $5,000 EV tax credit on purchases or leases of EVs with an MSRP of up to $80,000.

This lucrative incentive is slated to run until January 1, 2025, post which it will commence a gradual decrease until 2029.

This marks a considerable surge from the current $2,000 state EV tax credit for new EV acquisitions, and $1,500 for two-year leases. Moreover, starting January 1, 2024, EVs under $35,000 MSRP will qualify for an additional tax credit of $2,500.

However, it should be noted that these credits are not available to out-of-state residents – you must be a tax-paying citizen of Colorado to avail them.

Consider this scenario: you aim to purchase a new Tesla Model 3 Long Range with Dual Motor All-Wheel Drive priced at $47,240 before state sales tax, with no additional features. From July 1, this model will be eligible for both the federal tax credit of $7,500 and Colorado’s $5,000 state tax credit. This reduces the overall cost to $34,740.

Moreover, certain Colorado residents may also be entitled to utility rebates. It’s hard to envision any gas cars within the Model 3’s price range outperforming this substantial $12,500 tax credit.

This impressive deal certainly speaks volumes about Colorado’s commitment to EV adoption.

Photo courtesy of Tesla, Inc.

Haye Kesteloo
Haye Kesteloo

Haye Kesteloo is the Editor in Chief and Founder of EVXL.co, where he covers all electric vehicle-related news, covering brands such as Tesla, Ford, GM, BMW, Nissan and others. He fulfills a similar role at the drone news site DroneXL.co. Haye can be reached at haye @ evxl.co or @hayekesteloo.

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