Colorado Incentives and Laws for Natural Gas
The list below contains summaries of all Colorado incentives and laws related to Natural Gas.
State Incentives
Alternative Fuel, Advanced Vehicle, and Idle Reduction Equipment Tax Credit
An income tax credit is available from the Colorado Department of Revenue for a motor vehicle titled and registered in Colorado that uses or is converted to use an alternative fuel, is a hybrid electric vehicle (HEV), or has its power source replaced with one that uses an alternative fuel. Qualified idle reduction technologies are also eligible for the tax credit. Credits are based on defined vehicle and technology categories as follows:
| Category | January (Jan.) 1, 2010, to Jan. 1, 2012 | Jan. 1, 2012, to Jan. 1, 2013 | Jan. 1, 2013, to Jan. 1, 2014 | Jan. 1, 2014, to Jan. 1, 2015 | Jan. 1, 2015, to Jan. 1, 2016 |
|---|---|---|---|---|---|
| 1 - Vehicle meeting Tier 2, Bin 1 federal emissions standards | 85% | 75% | 75% | 75% | 75% |
| 2 - Light-duty diesel-electric hybrid passenger vehicle with a minimum fuel economy of 70 miles per gallon (mpg) | 65% | 45% | 25% | 15% | 15% |
| 3 - Light-duty passenger vehicle, light-duty truck, or medium-duty diesel-electric truck conversion that increases original fuel economy by at least 40%; or a new diesel-electric or gasoline-electric hybrid medium-duty truck with 30% greater fuel economy than a comparable vehicle | 75% | 55% | 35% | 25% | 25% |
| 4 - Light-duty passenger vehicle, light-duty truck, or medium-duty truck powered by compressed natural gas, either original equipment manufacturer or converted vehicles | 75% | 55% | 35% | 25% | 25% |
| 5 - Idle reduction technologies | 25% | 25% | 25% | 25% | 25% |
| 6 - Vehicle meeting Tier 2, Bin 2 or 3 federal emissions standards, with a fuel economy of at least 40 mpg | 75% | 10% | 10% | 0% | 0% |
The credit is capped at $6,000 for the following: alternative fuel vehicles (AFVs), AFV conversions, HEVs, plug-in hybrid electric vehicles (PHEVs), PHEV conversions, idle reduction technologies, and power source replacements. Beginning in 2012, the cap on PHEV conversions increases to $7,500. Individuals who claimed a tax credit in previous years for the purchase of a Model Year 2004 or newer HEV may be eligible to claim an additional credit for the conversion of the same vehicle to a PHEV. Credits claimed in tax years 2010 and 2011 for Category 3 and Category 4 vehicles that permanently replace vehicles or power sources at least 12 years old are eligible for 1.25 times the percentages displayed above, up to 100%. Credits generated in 2010 or 2011 that exceed the tax due are refundable but cannot be carried forward. Used vehicles may qualify with proof that the prior owners did not claim the tax credit. For additional information, see the Department of Revenue's Income 9 FYI publication.
(Reference House Bill 1018, 2011, and Colorado Revised Statutes 39-22-516)
Point of Contact
John Doty
Manager, Sales Tax Administration Unit
Colorado Department of Revenue
Phone: (303) 205-8211 x6889
jdoty@spike.dor.state.co.us
Low Emission Vehicle (LEV) Sales Tax Exemption
Vehicles, vehicle power sources, or parts used for converting a vehicle power source to reduce emissions are exempt from state sales tax. This exemption applies to vehicles, power sources, or parts for vehicles over 10,000 pounds gross vehicle weight rating that are certified to federal LEV standards. The vehicle power source includes the engine or motor and associated wiring, fuel lines, engine coolant system, fuel storage containers, and other components. (Reference Colorado Revised Statutes 39-26-719)
Alternative Fuel Vehicle (AFV) Weight Limit Exemption
Gross vehicle weight rating limits for AFVs are 1,000 pounds greater than those for comparable conventional vehicles, as long as the AFVs operate using an alternative fuel or both alternative and conventional fuel, when operating on a highway that is not part of the interstate system. (Reference Colorado Revised Statutes 25-7-106.8 and 42-4-508)
Utility/Private Incentives
Natural Gas Fuel Rate Reduction and Infrastructure Maintenance - Clean Energy
Clean Energy Fuels offers integrated fueling services to the natural gas vehicle industry that include compressed natural gas fueling station equipment maintenance, competitive fuel pricing for larger fleet customers, and alternative fuel vehicle financing.
Point of Contact
James Orsulak
Business Development Manager, Mountain Region
Clean Energy
Phone: (303) 322-4600
Fax: (303) 322-4644
jorsulak@cleanenergyfuels.com
Natural Gas Technical Assistance - Atmos Energy
Atmos Energy offers preliminary feasibility studies for compressed natural gas fueling stations and will assist with vendor selection on a case-by-case basis.
Point of Contact
Walter C. Miller
Energy Services Consultant
Atmos Energy
Phone: (817) 303-2903
Fax: (817) 303-2929
walter.c.miller@atmosenergy.com
Laws and Regulations
Alternative Fuels Tax and Vehicle Decal
Fuel tax exemptions are granted for natural gas and liquefied petroleum gas (propane) vehicle owners. Owners of natural gas and propane vehicles are required to purchase an annual tax decal from the Colorado Department of Revenue or a decal vendor as follows:
| Gross Vehicle Weight Rating | Annual License Tax Fee |
|---|---|
| 1-10,000 pounds (lbs.) | $70 |
| 10,001-16,000 lbs. | $100 |
| Over 16,000 lbs. | $125 |
All natural gas and propane vehicles must display a current fuel tax decal. Non-profit transit agencies are exempt from the fuel tax.
(Reference Colorado Revised Statutes 39-27-102.5)
Alternative Fuel Vehicle (AFV) Registration
Upon registering a motor vehicle with the Colorado Department of Revenue Division of Motor Vehicles, the vehicle owner must report the types of alternative fuel used to operate the vehicle and whether the vehicle is dedicated to one alternative fuel or uses more than one fuel. The Department of Revenue provides forms for the purpose of registering motor vehicles and must include space for the following fuel types: gasoline, diesel, propane, electricity, natural gas, methanol/M85, ethanol/E85, biodiesel, and other. (Reference Colorado Revised Statutes 42-3-113)
State Agency Alternative Fuel Use and Vehicle Acquisition Requirement
The Colorado Department of Personnel and Administration (DPA) has adopted a policy that requires all state-owned diesel vehicles and equipment to be fueled with a fuel blend of 20% biodiesel (B20), subject to the availability of the fuel and so long as the price differential is not greater than $0.10 more per gallon as compared to conventional diesel. Biodiesel is defined as fuel composed of mono-alkyl esters of long chain fatty acids derived from plant or animal matter that meets ASTM specifications and is produced in Colorado.
Additionally, DPA has adopted a policy to increase the use of alternative fuels and establish objectives to increase its use for each succeeding year. DPA must purchase motor vehicles that operate on compressed natural gas (CNG), subject to the availability of vehicles and adequate fueling infrastructure. If purchases of CNG vehicles are not possible due to the incremental cost being more than 10%, DPA must purchase another type of flexible fuel, hybrid electric, or all-electric vehicle, also subject to availability and incremental costs. DPA may adopt a policy to allow some vehicles to be exempt from this requirement.
Lastly, each state agency must develop a plan to improve commuting options for its employees. The plans should evaluate opportunities including plug-in electric vehicle charging.
(Reference Executive Order D0012 07, 2007, and Colorado Revised Statutes 24-30-1104)
Point of Contact
Art Hale
Colorado State Fleet Manager
Colorado Department of Personnel and Administration, Division of Central Services
Phone: (303) 866-5531
Fax: (303) 866-5511
art.hale@state.co.us
Alternative Fuel Definition
Alternative fuel is defined as compressed natural gas, propane, ethanol, or any mixture containing 85% or more ethanol (E85) with gasoline or other fuels, electricity, or any other fuels, which may include, but are not limited to, clean diesel and reformulated gasoline, so long as the Colorado Air Quality Control Commission determines that these other fuels result in comparable reductions in carbon monoxide emissions and brown cloud pollutants. Alternative fuel does not include any fuel product that contains or is treated with methyl tertiary butyl ether (MTBE). (Reference Colorado Revised Statutes 25-7-106.8)
Gasoline Gallon Equivalent (GGE) Definition
The term GGE is defined to equate the energy content of any motor fuel, including alternative fuels, to that of a gallon of gasoline. Any dispenser used for the sale of motor fuel in GGEs must display GGEs as the primary display information provided. (Reference Colorado Revised Statutes 8-20-232.5)
