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.