Colorado
Low Emission Vehicle (LEV) Sales Tax Exemption
Vehicles, vehicle power sources, or parts used for converting a vehicle power source, including but not limited to wiring, fuel lines, engine coolant system, fuel storage containers, fuel control system, and other components associated with reducing the emissions characteristics of an engine or motor, certified to federal LEV standards or better 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. (Reference Colorado Revised Statutes 39-26-719)
Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Rebate
The Colorado Department of Revenue offers a rebate for the purchase of an AFV, HEV, or for the conversion of a vehicle to operate using an alternative fuel. Vehicles must be owned by the State of Colorado, a political subdivision of the state, or a tax-exempt organization, and be used in connection with the official activities of the entity. The rebate is a percentage of the incremental cost if used toward purchasing a new vehicle, or is a percentage of the conversion cost if used towards the cost of converting a vehicle to operate using an alternative fuel.
For costs incurred between July 1, 2006, and July 1, 2009, the rebate percentages are as follows:
| Certification Level | Percentage |
|---|---|
| Low Emission Vehicle | 25% |
| Ultra Low or Inherently Low Emission Vehicle | 50% |
| Zero Emission Vehicle (ZEV) | 75% |
For an AFV purchase or conversion that permanently replaces a motor vehicle or power source that is at least 10 years old, the percentage specified in the table above is doubled, up to a maximum of 100% of the incremental or conversion cost.
For costs incurred between July 1, 2009, and July 1, 2015, the rebate percentages are as follows:
| Category | July 1, 2009, to July 1, 2010 | July 1, 2010, to July 1, 2011 | July 1, 2011, to July 1, 2012 | July 1, 2012, to July 1, 2013 | July 1, 2013, to July 1, 2015 |
|---|---|---|---|---|---|
| 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% AND (for 2010 and 2011) a new diesel-electric or gasoline-electric medium-duty truck hybrid 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 natural gas conversions | 75% | 55% | 35% | 25% | 25% |
| 5 - Idle reduction technologies | 25% | 25% | 25% | 25% | 25% |
| 6 - Vehicle meets Tier 2, Bin 2 or 3 federal emissions standards, with a fuel economy of at least 40 mpg | 75% | 10% | 10% | 0% | 0% |
Each qualified entity is limited to $350,000 per state fiscal year in total rebates paid.
(Reference House Bill 1331, 2009, and Colorado Revised Statutes 39-33-101 through 39-33-106)
Point of Contact
John Doty
AFV/Hybrid Taxes and Rebates
Colorado Department of Revenue
Phone (303) 205-8211
jdoty@spike.dor.state.co.us
http://www.revenue.state.co.us/mv_dir/home.asp
Truck Emissions Reduction and Fuel Efficiency Grants
The Green Truck Grant Program was established by the Colorado Governor's Energy Office to provide grants to owners of commercial trucks used in interstate commerce to reduce emissions and energy usage. Reimbursements of up to 25% of overall costs may be made to qualified recipients who purchase or install fuel-efficient technologies and emission-control devices approved by the U.S. Environmental Protection Agency's (EPA) SmartWay Transport Partnership, or any successor program, to reduce fuel consumption and emissions of greenhouse gases and other harmful air pollutants from trucks. Individual recipients may not receive more than $50,000, and the total of all reimbursements under this program may not exceed $500,000 per fiscal year.
Additionally, grants of up to $5,000 per qualified recipient are available for retiring and scrapping 1989 or older model year trucks that have been documented to have been in use for at least 10,000 miles during the calendar year preceding the recipient's grant application, and which are donated to an established auto parts or scrap metal recycler that meets state and U.S. EPA recycling requirements. The total of all reimbursements under this program may not exceed $250,000 per fiscal year. (Reference House Bill 1298, 2009, and Colorado Revised Statutes 42-1-301 to 42-1-305)
Greenhouse Gas (GHG) Emissions Reductions
The State of Colorado has set goals to reduce GHG emissions by 20% below 2005 values by 2020 and by 80% below 2005 values by 2050. The Colorado Department of Public Health and Environment (CDPHE) is directed to develop regulations to submit to its Air Quality Control Commission that mandate reporting of GHG emissions from all major sources. CDPHE must plan for performing updates to the state's GHG inventory and identify and evaluate the benefits and impediments to measures designed to reduce tailpipe emissions from light-duty vehicles, including the utility and availability of alternative fuel vehicles. Additionally, CDPHE must develop a proposal for reducing net GHG emissions from the state's transportation sector. (Reference Executive Order D004 08 (PDF 24 KB)) Download Adobe Reader
Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) 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 vehicle, or has its power source replaced with one that uses an alternative fuel. For vehicles purchased or converted between January 1, 2007, and January 1, 2010, the percentage of the actual or incremental cost that may be claimed as a credit is as follows:
| Type of Vehicle | Percentage |
|---|---|
| Low Emission Vehicle | 50% |
| Ultra Low or Inherently Low Emission Vehicle | 75% |
| Zero Emission Vehicle (ZEV) | 85% |
Beginning January 1, 2010, tax credits are based on specified state-defined vehicle 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% AND (for 2010 and 2011) a new diesel-electric or gasoline-electric medium-duty truck hybrid 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 natural gas conversions | 75% | 55% | 35% | 25% | 25% |
| 5 - Idle reduction technologies | 25% | 25% | 25% | 25% | 25% |
| 6 - Vehicle meets Tier 2, Bin 2 or 3 federal emissions standards, with a fuel economy of at least 40 mpg | 75% | 10% | 10% | 0% | 0% |
| 7 - Vehicle meets Tier 2, Bin 2 or 3 federal emissions standards, with a fuel economy of at least 30 but less than 40 mpg. (Excludes original equipment manufactured natural gas vehicles.) | 50% | 0% | 0% | 0% | 0% |
These credits are capped at $6,000 for the following: AFVs, AFV conversions, HEVs, plug-in hybrid electric vehicles (PHEVs), PHEV conversions, idle-reduction technologies, and power source replacements; there is no cap on natural gas vehicle conversions. Between 2012 and 2016, the cap on PHEV conversions increases to $7500. Individuals who claimed a tax credit in previous years for the purchase of a HEV, Model Year 2004 or newer, may be eligible to claim an additional credit for the conversion of the same vehicle to a PHEV. For credits claimed in tax years 2010 and 2011, Category 3 and Category 4 vehicles that permanently displace vehicles or power sources at least 12 years old are eligible for 1.25 times the credit percentages displayed up to 100%. Additional information is also available from the Governor's Energy Office.
(Reference House Bill 1331, 2009, and Colorado Revised Statutes 39-33-101 to 39-33-106)
Point of Contact
Division of Taxation
Colorado Department of Revenue
Phone (303) 238-7378
http://www.revenue.state.co.us/main/home.asp
