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Buying a Colorado Inventory Tesla...Check Odometer

FlasherZ

Sig Model S + Sig Model X + Model 3 Resv
Jun 21, 2012
7,028
1,025
Apparently, Colorado defines "new" vehicle as one with less than 1,500 miles.
So any inventory Model S over that mileage cannot be registered as new and is not eligible for the federal tax credit or the $6,000 Colorado state tax credit.

Beware.

It may not be eligible for the state credit, but the federal credit isn't subject to the strange state rules, unless the state forces Tesla to title it in their name before transferring to you. Even then, the IRS checks based on the VIN number (and I doubt Tesla can file for the credit anyway).

From Plug-In Electric Drive Vehicle Credit (IRC 30D) :

The vehicles must be acquired for use or lease and not for resale. Additionally, the original use of the vehicle must commence with the taxpayer and the vehicle must be used predominantly in the United States. For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law.

Tesla holding the Manufacturer's Statement of Origin doesn't qualify as "original use". I suspect you would be able to file it with your federal tax return, because it will pass the IRS's VIN checks and you'd have an argument that the IRS needs to treat all fairly. Of course, you may have to fight to get it - and I may be wrong in how they look for it - so ask your tax advisor.

...although not having the $6k CO credit kinda sucks... I've always purchased dealer demonstrators, they're always priced well, have been taken care of, and get titled as "new". It's a shame CO treats them differently.
 
Here is what the Denver store manager told me in an email...

"The 1,500 mile rule will affect the federal tax credit. New cars cannot be registered if they more than 1,500 miles in the state of CO. The DMV will actually refuse to register cars with more than 1,500 miles. Tesla will also not register the car because we would have to pay sales tax on the car and registration fees as well."

Not sure where that leaves me...
 
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MorrisonHiker

Well-Known Member
Moderator
Mar 8, 2015
10,582
10,650
Colorado
Instead of buying an inventory vehicle from the Denver site, get one from out of state and you should be able to get the $6000 state and $7500 federal tax credits. The state tax credit should work for used or inventory vehicles that have not previously been registered in Colorado. It really doesn't make sense to buy local CPO (and perhaps high mileage inventory) if you can buy from out of state and save thousands even after paying to have it shipped.

There is no mention of the 1500 miles here.

The rules say used cars are still eligible so whether you register it as new or used shouldn't matter...it's whether or not it has been previously registered in Colorado that counts.
 
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MorrisonHiker

Well-Known Member
Moderator
Mar 8, 2015
10,582
10,650
Colorado
Ah. Just saw your second message concerning just the federal credit. Hopefully someone on the forum can confirm whether our not that's really the case. I haven't heard anyone else mention that being an issue before.

I did some quick searching and did find the 1500 mile rule for new/used. That could affect the federal credit but you should still be able to get the $6000 state credit if it hadn't been registered here before.
 

ItsNotAboutTheMoney

Well-Known Member
Jul 12, 2012
11,787
9,951
Maine
Ah. Just saw your second message concerning just the federal credit. Hopefully someone on the forum can confirm whether our not that's really the case. I haven't heard anyone else mention that being an issue before.

I did some quick searching and did find the 1500 mile rule for new/used. That could affect the federal credit but you should still be able to get the $6000 state credit if it hadn't been registered here before.

Yes, it could affect the federal credit, because the law is that once it reaches 1,500 miles it would have to be titled by the dealer, which the Federal govt could consider being put into service. I don't think it would absolutely preclude the Federal tax credit, but there would certainly be a risk of rejection.
 

bonaire

Active Member
Aug 24, 2013
2,482
1,076
USA
If Titled, it doesn't hit the IRS until the bank or owner (whomever) processes a tax return to claim the deduction and there they supply the Vin #.
If a dealer has a 1600 mile car, never titled, that is sold as new, you can surely take the IRS Federal Tax Deduction.

In CO - you can claim the state tax credit for a car that has not yet been titled in the state. I have to think that it must be also under 1500 miles? If not, then there is a huge hole for taking a good chunk of cash even for newly-registered used EVs in that state. Buy a used Leaf from CA for $13,000 and bring it to CO and get $6000 back... Ugh. Bad plan if so (for the taxpayers' sake).
 

tga

Active Member
Supporting Member
Apr 8, 2014
4,147
3,244
New Hampshire
In CO - you can claim the state tax credit for a car that has not yet been titled in the state. I have to think that it must be also under 1500 miles? If not, then there is a huge hole for taking a good chunk of cash even for newly-registered used EVs in that state. Buy a used Leaf from CA for $13,000 and bring it to CO and get $6000 back... Ugh. Bad plan if so (for the taxpayers' sake).
If the car has not been titled in CO, it is eligible for the state credit, whether new or used. From top of page 4 of MorrisonHiker's link above:

Used vehicle purchases
No credit is allowed for the purchase of a used electric, plug-in hybrid electric, or gasoline-electric hybrid motor
vehicle if a credit was previously claimed for the vehicle by any prior owner. Any credit claimed for the purchase of a
used vehicle must be accompanied by a "Vehicle History Report" showing the vehicle was not previously registered
in Colorado. A “Vehicle History Report” can be obtained from any of a number of third party companies that offer
such reports. An internet search for the phrase "Vehicle History Report" should provide a listing of companies that
can produce this report. A used electric, plug-in hybrid electric, or gasoline-electric hybrid motor vehicle must meet all
of the criteria listed at the top of page 3 in order to qualify for the credit.

On gm-volt.com, there was discussion of a CO used car dealer that specialized in bringing used, never-registered-in-CO Volts into the state for this very reason.

This document (section 12, top of page 10) says the dealer must title it in their name before selling to the purchaser as a used car:

Vehicles with more than one fifteen hundred (1500) miles of demonstration use shallbe considered "used" vehicles. Such "demonstrators" and other motor vehicles which have been used by a dealer prior to their sale shall be titled in the dealer's name and sold as "used" motor vehicles.

For a car with over 1500 miles, I can only see 2 solutions - either Tesla titles it in their name, and sells it used to the CO buyer using Tesla's title, or the buyer takes the MSO, titles it in another state that allows non-resident registrations/titles (preferably w/out sales tax), waits for the title to arrive, and then registers it in CO as a used car. The first one is simpler, but puts the Fed credit at risk, depending on their view of "original use". The second should secure the Federal credit, but is a lot more complicated. If you were financing the car, the bank would probably blow a gasket over it.
 

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