Colorado

High Occupancy Vehicle (HOV) Lane Exemption

Vehicles that meet the definition of the EPA Inherently Low Emission Vehicle (ILEV) classification and have a gross vehicle weight rating of 26,000 pounds or less may be operated upon HOV lanes regardless of the number of occupants and without payment of a special toll or fee. A special sticker must be obtained from the state Department of Transportation. At this time, hybrid electric vehicles do not qualify as ILEVs due to the use of conventional gasoline fuel and cannot receive the HOV exemption decal. (Reference Colorado Revised Statutes 42-4-1012)

Point of Contact

Teresa Carrillo
Commercial Vehicle Operations Manager
Colorado Department of Transportation
Phone (303) 757-9716
Fax (303) 757-9719
teresa.carrillo@dot.state.co.us

Low Emission Vehicle (LEV) Sales Tax Exemption

Vehicles, vehicle power sources, or parts used for converting a vehicle power source 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) 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:

Tax credits for Model Year 2007 HEVs and AFVs are as follows:

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

Alternative Fuel Vehicle (AFV) Rebate

A rebate is available from the Colorado Department of Revenue for the purchase of an AFV 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. HEVs also qualify for this incentive. The rebate is a percentage of the incremental cost if used toward purchasing a new AFV, or is a percentage of the conversion cost if used towards the cost of converting a vehicle to operate using an alternative fuel. 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. Each qualified entity is limited to $350,000 per state fiscal year in total rebates paid. The rebate value is as follows:

For more information about this rebate, see the Colorado Department of Revenue's Alternative Fuel Income Tax Credits Web site.

(Reference Colorado Revised Statutes 39-33-101 through 39-33-106)