Colorado is now considered as the most generous state when it come to electric vehicle tax credit. On July 1, Colorado EV tax credit increased from $2,000 to $5,000 for any electric vehicle that costs at least $80,000. Based on a data from U.S. Department of Energy, Colorado gives more incentive now than most states.
Colorado EV tax credit changes effects
With the changes in Colorado EV tax credit, it will not be surprising that the sales of electric cars will jump higher as well. According to KRDO, the demand for electric cars in Colorado has always been high for the past few years. A data from Colorado Auto Dealers Association showed that 10.5% of cars sold in the state are electric. With this huge offers in Colorado EV tax credit, the state is hoping it will build momentum to increase the sales even higher.
CPR News reported that when President Joe Biden renewed the credit with new restrictions back in 2022, the federal $7,500 rebate on electric vehicles helped with the increase in sales. The new restrictions in Colorado EV tax credit back then also encouraged car makers to use local suppliers for building.
Colorado EV tax credit eligibility
In order to be eligible for the Colorado EV tax credit changes, according to EV CO, one must be a resident and is paying taxes in Colorado for at least 2 years. Starting January 1, 2024, EVs that cost at least $35,000 will get an additional $2,000 tax credit.
Meanwhile, the federal Colorado EV tax credit of up to $7,500 for new EV purchases requires personal or household income data, vehicle MSRP caps, vehicle production details, and battery components. Vehicles that meet all requirements except for the battery components and sourcing will be given half of the tax credit.
EVs that are being rented are also eligible for the $7,500 Colorado EV tax credit but are not required to meet the qualifications mentioned above as of January 2023. As of today, Colorado EV tax credit is the most generous incentive given to citizens among each state.