Colorado is trailblazing with a new law that ramps up impressive EV state tax credits for both purchases and leases.
Colorado’s new EV state tax credits
Governor Jared Polis (D-CO) signed House Bill 23-1272 into law on May 11. On page eight it says that from July 1, 2023, all Colorado residents who purchase or lease an EV with MSRP up to $80,000 qualify for an EV tax credit of $5,000. This tax credit will be in place until January 1, 2025, when the EV tax credit then begins to drop incrementally until 2029.
This is a big boost from the current $2,000 state EV tax credit for new EV purchases, and $1,500 for two-year leases.
Beginning January 1, 2024, EVs under $35,000 MSRP will be eligible for an additional tax credit of $2,500.
And sorry to be a Debbie Downer, but you can’t just cross state borders in order to get Colorado’s EV tax credit – you actually have to pay taxes in Colorado.
Electrek’s Take
Let’s say you want to buy a new Tesla Model Y Long Range with Dual Motor All-Wheel Drive. I’ve not added any extras when choosing the model, so the cost is $50,490 before state sales tax.
This model already qualifies for the federal tax credit of $7,500, and from July 1, it also qualifies for Colorado’s state tax credit of $5,000.
Top comment by Steve Bee
I think the deal would be better if Colorado did an outright rebate, that way people that don't have enough income to owe $5000 in taxes can still benefit. Here in MA, the incentive is $3500 rebate from the state, regardless of one's MA state income tax liability.
That drops the price down to $37,990, and some folks in Colorado may qualify for rebates from their utilities as well.
I simply can’t see how any gas cars within the Model Y’s price range could beat this deal of a $12,500 tax credit. Nice one, Colorado.
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