Colorado officially approves $5,000 tax credit for electric vehicles – up to $12,500 with federal incentive

Colorado official passed its bill HB 1332 to update its electric vehicle incentive program. The legislation now gives electric vehicle buyers in Colorado a $5,000 tax credit which can be immediately realized at purchase through a dealer incentive.

It’s a significant improvement over the state’s previous program, which was already generous, but nowhere near as straightforward and efficient as it is now.

The Southwest Energy Efficiency Project (SWEEP) on the new program:

“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.”

When combined with the $7,500 federal tax credit, it makes electric vehicles extremely competitive in the state.