Can anyone explain the Colorado state tax credit for EVs?

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solarchargeddriver

Well-known member
Joined
Dec 29, 2010
Messages
49
Location
Colorado
First, here's a link to the the "FYI Income 9 Alternative Fuel Income Tax Credits" for the State of Colorado (2011)-- http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251713597816&ssbinary=true" onclick="window.open(this.href);return false;

Second, I personally find the language of the document to be ambiguous. Here's how I'm reading the document above -- though I'm hoping someone who's better at translating legalese and better at math than I am might be can set me straight if I'm reading it wrong, which I could well be.

According to the document -->

"The credit is a percentage [85%] of: a) The difference between the cost of the vehicle and the cost of the same or most similar vehicle that uses a traditional fuel."

I would say a Nissan Versa is the most similar vehicle that uses a traditional fuel -- but who knows, maybe the State of Colorado will say the most similar vehicle is a Toyota Prius. How they make this "similarity" determination, I do not know.

In any case, an entry level Versa = about $11,000. That's a helluva lot less than the approximately $28,000 for a 2012 LEAF SV, post Federal Tax Credit., actually about $16,000 less (I'm rounding numbers here).

The way I'm reading this document, you're eligible for a tax credit of 85% of the difference.

$16,000 x .85 = $13,600

Now, even if the rules are such that the $7,500 federal tax credit gets lopped off the sticker price AND must ALSO be subracted from the total tax credit eligibility I've calculated above, you still have -->

$13,600 - $7,500 = $6,100

And, according to the language in the Colorado Dept. of Revenue document above, you can carry that tax credit across multiple tax years if your total tax liability isn't enough in year 1, 2, etc.:

"If the credit allowed exceeds the net tax liability for that year, any excess credit may be carried forward and claimed on future year returns for up to five years until the credit is fully utilized."

So, I'm basically wondering if I'm completely misreading the document above -- clarifications are welcome :)
 
In another thread (http://www.mynissanleaf.com/viewtopic.php?f=27&t=5714&p=135761&hilit=colorado#p135761), the below calculation was posted for the 2011 Leaf. It is less for those purchased next year:

$12,250.00(IPD) - $7,500(FTC) = 4,750

$4,750 x 0.85 = $4,038

Your tax credit is $4,038.00


I believe it carries forward, but I will have enough taxes paid to not test that proposition.

I think that the IPD they are starting with is a little conservative, but the Versa cannot be tricked-out to match the base Leaf.
 
The Division of Revenue is being opaque as to the similar traditional fuel vehicle used. When I asked about the credit for a 2012 Leaf, I got the 2010 Leaf numbers, even though there were no 2010 model year Leafs, so far as I know. When I asked again about the more expensive 2012, I was told that the 2011 would be similar to the previous (2010) numbers and that the numbers came from Nissan. Huh? I then contacted Nissan and was told they have nothing to do with it but that perhaps their published pricing for their vehicles was being used by the state.

I presume that come tax time there should be numbers in a revised pdf document for 2011 and 2012 models. If not, I will try to contact them again. If I don't get useful information I will derive my own and if they want to discuss it, fine.

One thing to be aware of is that the "Innovative Motor Vehicle Credit" drops to 75% of the difference beginning January 1, 2012, compared to the previous "Alternative Fuel Credit" of 85%.

Also, the credit is refundable. For 2011:
"Credits generated in 2010 or 2011 that exceed the tax due for that year are not carried forward but are refundable."
For 2012-2015:
"If an authorized credit exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer."


Some things I am unclear on:

• Is there a form one can use to calculate the credit? The tax credit form just has slots for the final numbers, however they are derived, and I can find no instructions for the form.

• If one can't use the entire federal tax credit, should that be reflected in the calculations? I presume so, but was unable to get an answer from the DOR rep.
 
reeler said:
In another thread (http://www.mynissanleaf.com/viewtopic.php?f=27&t=5714&p=135761&hilit=colorado#p135761), the below calculation was posted for the 2011 Leaf. It is less for those purchased next year:

$12,250.00(IPD) - $7,500(FTC) = 4,750

$4,750 x 0.85 = $4,038

Your tax credit is $4,038.00


I believe it carries forward, but I will have enough taxes paid to not test that proposition.

I think that the IPD they are starting with is a little conservative, but the Versa cannot be tricked-out to match the base Leaf.

Thank you for the info -- sorry to be dense, but what does IPD stand for?
 
dgpcolorado said:
Also, the credit is refundable. For 2011:
"Credits generated in 2010 or 2011 that exceed the tax due for that year are not carried forward but are refundable."
For 2012-2015:
"If an authorized credit exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer."

What document are you pulling the above from? It seems to be in direct contradiction with the document (link in my original post) I pulled this from -->

"If the credit allowed exceeds the net tax liability for that year, any excess credit may be carried forward and claimed on future year returns for up to five years until the credit is fully utilized."

Some things I am unclear on:

• Is there a form one can use to calculate the credit? The tax credit form just has slots for the final numbers, however they are derived, and I can find no instructions for the form.

• If one can't use the entire federal tax credit, should that be reflected in the calculations? I presume so, but was unable to get an answer from the DOR rep.


Excellent questions -- wonder if anyone, anywhere (including DOR), has, or knows the answers

Early adopters like us will work hard to figure it all out, but sadly the complexity/ambiguity of tax credits like this one in Colorado sure isn't going to help to encourage mainstream folks to buy an EV.
 
solarchargeddriver said:
reeler said:
In another thread (http://www.mynissanleaf.com/viewtopic.php?f=27&t=5714&p=135761&hilit=colorado#p135761), the below calculation was posted for the 2011 Leaf. It is less for those purchased next year:

$12,250.00(IPD) - $7,500(FTC) = 4,750

$4,750 x 0.85 = $4,038

Your tax credit is $4,038.00


I believe it carries forward, but I will have enough taxes paid to not test that proposition.

I think that the IPD they are starting with is a little conservative, but the Versa cannot be tricked-out to match the base Leaf.

Thank you for the info -- sorry to be dense, but what does IPD stand for?

OK, looked at the other thread -- Incremental Price Difference (IPD). But it's still a mystery to me what car model DOR is using to determine IPD, and on what (arbitrary?) basis...
 
solarchargeddriver said:
dgpcolorado said:
Also, the credit is refundable. For 2011:
"Credits generated in 2010 or 2011 that exceed the tax due for that year are not carried forward but are refundable."
For 2012-2015:
"If an authorized credit exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer."

What document are you pulling the above from? It seems to be in direct contradiction with the document (link in my original post) I pulled this from -->

"If the credit allowed exceeds the net tax liability for that year, any excess credit may be carried forward and claimed on future year returns for up to five years until the credit is fully utilized."
I think I got my information from the same document you used: FYI Income 9 Alternative Fuel Income Tax Credits

The first one is at the bottom of page 1:
"Credits generated in 2010 or 2011 that exceed the tax due for that year are not carried forward but are refundable."

The second one, for 2012-2015, is near the bottom of page 6:
"If an authorized credit exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer."

This does contradict the wording you quoted higher up on page 1. Figures!

However, when one looks at the credit tax form FORM 104CR the credit seems to be refunded. (But that is the 2010 tax year form and it could be changed for 2011.)

I dread doing it, but it might be time to read the CRS that defines the vehicle tax credits.
 
I think I remember some CO folks getting really great deals on their Tesla Roadsters. By comparing them to the Lotus Elise they got $45K (ish) back from the state. :shock: I also think CO was going to change the formula after seeing this happen.
 
Guys, I would definitely send an information clarification request to those within the state to get your answers -- I did that with our IL EPA who regulates this and while it took awhile, we needed a clarification on whether their credit would apply to both outright purchases and leases (it doesn't, leases are ineligible), we got our answer -- you can also check with however does your state taxes so it doesn't get rejected. Getting 45K back on a Tesla roadster is unbelievable, what a great deal if its true. Perhaps I should move to CO and buy a Fisker Karma -- wouldn't that be sweet!
 
Hi all. I took a $22,000 tax credit on my RAV4 EV in 2007 which I've been carrying forward. For the 2011 Leaf, titled and registered in 2011, the credit is lowered from the new $6000 cap due to the federal credit. If you don't take the federal credit, you would get the full $6000.

Nate
 
Greetings!! My first post to this Forum, and I'm thrilled to see so much excellent information.

The calculation for a lease is a bit more complex. I ran the numbers and asked my Nissan dealer to do the same. We reached the same figure, a not-so-rosy $2,400 as opposed to the $6,000 when one purchases.

My expertise in Colorado tax law is slightly less than my expertise in neuro-surgery, and I ain't a doctor!! :lol:

So, best to run the numbers yourselves in conjunction with your Nissan dealer.

Has anyone heard any details as to what the 2012-2015 tax credit will be? Or if with the current state of the Colorado treasury there will even be one?

Thanks all!!

Ohm Boy
 
I'll contact my Tax advisor in the coming days and get back to this. The last time I spoke to her though, about 4 months ago, she said:

The amount you get back is after all federal credits. If you owe $10k in taxes, you get back $9k from other credits (like solar/mortgage/etc) you will only get 1k from Colorado.
The credit cannot be carried over.
 
This post from seeker in the Re: 2nd LEAF in Colorado? thread describes how it is calculated:
seeker said:
BTW, I don't know about you other guys in CO, but I have been in contact with Doty, John B. from the DOR about the CO tax rebate, and we have new numbers:
The incremental price difference (IPD) for the Nissan leaf is $12,250
, which is higher then they originally posted, so the tax credit should be turning out to be:
$12,250.00(IPD) - $7,500(FTC) = 4,750

$4,750 x 0.85 = $4,038

Your tax credit is $4,038.00

Just FYI
(Be aware that the factor is reduced from 85% to 75% beginning January 1st.)

I think seeker's number is for a 2011 LEAF. The problem is that when I contacted the same DOR individual I couldn't get him to give me any numbers for a 2012 LEAF (or even understand what I was asking). If the DOR doesn't come up with revised numbers in their "FYI Income 9 Alternative Fuel Income Tax Credits" document, I will have to make my own estimates and then we can discuss it.

If one can't use the entire federal tax credit (it isn't refundable) my take is that the Colorado tax credit will be increased until it maxes out at the $6000 cap. Unlike the federal tax credit, the Colorado tax credit does seem to be refundable.
 
Since the DoR hasn't revised the FYI Income 9: Alternative Fuel Income Tax Credits document and those contacting them haven't been able to get useful information about the "Incremental Price Difference" to be used for a 2012 LEAF, I've come up with my own numbers:

I think that the most similar conventionally fueled vehicle to the LEAF is the Nissan Versa.

Price of 2012 Nissan Versa SL $18,490 + $700 for nav package = $19,190. Includes some features not on the LEAF SV, such as fog lights.

Price of 2012 Nissan Versa S $14,480 + $700 for nav package + $770 for special edition package (keyless entry, bluetooth, cruise control, etc.) = $15,950.

Price of 2012 LEAF SV $35,200.


Incremental price difference LEAF SV to Versa SL = $16,010 - $7500 (federal tax credit) = $8510

85% of $8510 = $8510 x 0.85 = $7234

$7234 > $6000 so the tax credit is $6000



How or whether one has to submit documentation when claiming the credit I don't know. I usually file my state tax return using the state-authorized website. It will be a few weeks before I get to it, but I may just print out forms and send in the return by mail this year.


Anyone else have any better information?
 
dgp, you are doing the math correctly, however, the comparable vehicle is the only open question. TurboTax has a major bug for this, even the Chevy Volt is showing ZERO tax credit from the state of Colorado. How do you call Turbotax to correct this?

Nate
 
nater said:
dgp, you are doing the math correctly, however, the comparable vehicle is the only open question. TurboTax has a major bug for this, even the Chevy Volt is showing ZERO tax credit from the state of Colorado. How do you call Turbotax to correct this?

Nate
I have never used tax software for the Colorado state income tax. Our state income tax is so absurdly simple it is easy to do it on-line (on the free state-sponsored site) or by mailing in a form or two. If Turbotax can't handle the EV credit, just skip doing it via TT.

As for the most similar conventionally fueled vehicle, the Versa is the ONLY reasonable choice. If the DOR doesn't accept it, I will fight it. If you've ever seen a LEAF next to a Versa, it is hard to tell them apart, headlights, taillights, and spoiler being among the few differences in appearance.
 
I just finished my Colorado filing using Turbo Tax and I can tell you what steps to take as Turbo Tax does not tell you all that is needed to send in. When finished with Turbo Tax and you do an e-file, the software will let you know that you need to print out a paper and send it along with the sales receipt of the vehicle. What Turbo Tax does not tell you is that you also need to send in a copy of the vehicle registration. The 104 tax form tells you that but not the software.

Also, when it comes to the actual numbers to use for 2011 and 2012 taxes... I have the following direct form John Doty, Manager, Sales Tax Administration Unit for the State of Colorado:

Nissan Leaf
2011 &2012 Leaf: Category 1
Incremental price difference $13,920.00
Incremental price difference for comparison after FTC $6,420
Tax credit available for tax year 2011 $5,457.00
Tax credit available for tax year 2012 $4,815.00

Hope this helps.
 
batzman said:
Also, when it comes to the actual numbers to use for 2011 and 2012 taxes... I have the following direct form John Doty, Manager, Sales Tax Administration Unit for the State of Colorado:

Nissan Leaf
2011 &2012 Leaf: Category 1
Incremental price difference $13,920.00
Incremental price difference for comparison after FTC $6,420
Tax credit available for tax year 2011 $5,457.00
Tax credit available for tax year 2012 $4,815.00

Hope this helps.
Since the 2012 was substantially more expensive than the 2011 model using the same numbers makes no sense unless the comparable vehicle increased at exactly the same rate. I don't buy it.
 
I read through all of this and I am afraid that none of this iv very relevant in Colorado. I am not 100% positive but I worked for Tesla and Colorado changed the EV tax credit to an "OR" so you could take the FTC OR the State but not both. So with the FTC being a higher credit it wont make much sense to take the CO credit. I hope this has been changed since 2010 but I am assuming not. If anyone has the exact wording please post it so everyone knows exactly what they can get I talked to a Nissan dealership and they were not very clear.
 
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