Colorado Incentives and Laws
Alternative Fuel Vehicle (AFV) and Hybrid Electric Vehicle (HEV) Tax Credit
An income tax credit is available from the Colorado Department of Revenue for the incremental cost of purchasing an AFV or for the conversion of a vehicle to operate using an alternative fuel. HEVs also qualify for this incentive. This credit is only available in the year during which the vehicle was purchased or converted, and a vehicle may only qualify for this credit one time. For an AFV purchase or conversion that permanently replaces a motor vehicle or power source that is ten or more years old , the percentage specified in the table below is doubled, up to a maximum of 100% of the incremental or conversion cost. To the extent the allowable credit exceeds the person's tax liability for that year the excess may be carried forward for up to five years. Lessees or lessors of qualifying vehicles are also eligible for the credit. The value of the credit is based on the EPA emissions classification of the vehicle as follows:
| Type of Vehicle | Tax Year Beginning Prior to January 1, 2010 | January 1, 2010-January 1, 2012 |
|---|---|---|
| Low Emission Vehicle (LEV) | 50% | 25% |
| Ultra Low or Inherently Low Emission Vehicle (ULEV or ILEV) | 75% | 50% |
| Super Ultra Low or Zero Emission Vehicle (SULEV or ZEV) | 85% | 75% |
Tax credits for Model Year 2007 HEVs and AFVs are as follows:
| Vehicle Model | Tax Credit |
|---|---|
| 2007 Ford Escape Hybrid (Front Wheel Drive) | $1,942 |
| 2007 Ford Escape Hybrid (Four Wheel Drive) | $1,972 |
| 2007 Honda Accord Hybrid | $3,209 |
| 2007 Honda Civic Hybrid | $2,756 |
| 2007 Honda Civic GX Natural Gas Vehicle | $5,806 |
| 2007 Lexus GS 450h Hybrid | $6,452 |
| 2007 Lexus RX 400h Hybrid | $3,906 |
| 2007 Mercury Mariner Hybrid | $2,265 |
| 2007 Toyota Camry Hybrid | $2,265 |
| 2007 Toyota Highlander Hybrid (Base Grade) | $3,846 |
| 2007 Toyota Highlander Hybrid (Limited Grade) | $3,464 |
| 2007 Toyota Prius Hybrid | $3,013 |
For vehicle eligibility updates and historical credit information, see the Colorado Department of Revenue's Alternative Fuel Income Tax Credit Web site.Neighborhood electric vehicles do not qualify for the AFV credit since they cannot be operated on Colorado highways.
(Reference Colorado Revised Statutes 39-22-516)
Point of Contact
Tax Information Call Center
Colorado Department of Revenue
Phone (303) 238-7378
http://www.revenue.state.co.us/main/home.asp
