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Colorado $6000 tax credit changes to $5000 point-of-sale rebate

Discussion in 'Mountain/Southwest' started by dgpcolorado, May 18, 2016.

  1. dgpcolorado

    dgpcolorado Member

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    Buying an electric car in Colorado just got $5,000 cheaper

    While the drop from $6000 to $5000 is a bit disappointing to me, the new rebate should make things much simpler and, perhaps, increase EV sales. But it also eliminates (so far as I can tell from a quick read of the bill) the Colorado tax credit on used EVs that haven't been registered in the state before, which is another disappointment. Any Coloradan considering a used EV purchase might want to complete it this year.

    At least I can get the full credit on my CPO Model S purchase under the old law.
     
  2. MileHighMotoring

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    There was already a thread on this - admins deleted it? I can't find it. It was active yesterday and today and vanished.
     
  3. Barry

    Barry Member

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    Terribly deceptive title (from the Denver Post, not you) and poor reporting.
     
  4. MileHighMotoring

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    Fair enough - can't mods edit the thread title in lieu of deleting it?
     
  5. dgpcolorado

    dgpcolorado Member

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    There was a thread in the New England forum by someone comparing the new Colorado incentives to those they have there. I decided a thread here would be more useful for Coloradans. If mods don't like it, they can delete it I suppose.

    I agree that the article title is misleading. I just put in the DP link. In retrospect I should have put in my own url code and forced the system to use my own link title.
     
  6. Mkorpal

    Mkorpal Member

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    I like the idea of the rebate going to the financing company in the form of a down payment, rather than having to deal with it as a credit going to me (and having to deal with all that mess). But I fear the usual government bureaucracy screwing it all up. Like the repo guys picking up my car because the bank never got the 5 grand from the state.
     
  7. MorrisonHiker

    MorrisonHiker S 90D 17.5.28

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    While the article does mention that you can still claim the credit when filing your taxes, it doesn't mention that if you chose to transfer the credit to the lender, they can charge $150 for that service.

    It probably will make things cheaper overall if it reduces sales tax and registration fees as well.
     
  8. AlanSqB

    AlanSqB Dog Chauffeur

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    Has anyone here had the opportunity to use this new version of the credit yet? I'm just wondering if it's going to be able to be used as the down payment or if it's just going to be a reduction of the financed amount.

    I've got a Model 3 deposit down and was wanting to move that over along with the CO credit as the down payment.
     
  9. Deans

    Deans Member

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    Isn't this $5,000 at point of sale better than a $6,000 state tax credit? If I take a $6,000 state tax credit, it will reduce my state tax deduction by $6,000 on my federal return. If I'm in the highest tax bracket, the $6,000 credit is effectively a $3,600 tax credit when federal taxes are considered. Right? And, as stated above, this would reduce sales tax by an additional $200 - $400 depending on where you live in Colorado.
     
  10. MorrisonHiker

    MorrisonHiker S 90D 17.5.28

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    When we spoke with Tesla employees a few months ago, they still didn't know if Tesla was going to participate in the $5000 off point of sale. At the time, they doubted the would and said one would have to claim it when filling taxes. I haven't heard of anyone getting it at point of sale yet.
     
  11. Mkorpal

    Mkorpal Member

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    Federal and state taxes should have no bearing on each other. You would get $6,000 in benefits, either way.

    As for Tesla, my understanding reading the thing was it was payable to whoever the lender is, either you if you pay cash or the bank/credit union if you get a loan. I don't think Tesla would be really involved either way. Not sure about leases though.
     
  12. Deans

    Deans Member

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    Can you explain that to me? Normally, if I pay $6,000 in state income taxes, I can deduct that amount off my federal net income. That reduces my federal tax owed by $6,000 x my marginal tax rate (40% including 3% for Obamacare). So I save $2,400 on my federal return due to paying $6,000 to state.

    If I get a $6,000 state tax credit, by state income tax paid would drop to $0.
    But I would be deducting $0 in state tax paid from my federal return. So I would get a $6,000 credit but owe an extra $2,400 on my federal return. Did I do that wrong?
     
  13. Mkorpal

    Mkorpal Member

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    Ah, I see where you are coming from. I never really have deductions and don't owe enough state tax so I usually just go for the standard. I thought you were implying that the state credit changed the federal credit.
     
  14. Deans

    Deans Member

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    Dang, I was hoping I was wrong !
     
  15. Deans

    Deans Member

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    Might not matter if Trump passes his tax plan that gets rid of deductions
     
  16. MrClown

    MrClown Autosteer Beta Tester

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    You're not wrong, unfortunately.
     
  17. AlanSqB

    AlanSqB Dog Chauffeur

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    This is what I was figuring might happen. My plan would be to turn around and put the rebates right back into paying the loan down more so I guess there's no major difference in the long run other than interest on that extra $5k for the months until I get the rebate.

    I'm not at all worried about the $5k CO credit going away, but given the current climate, I'm kind of worried about the federal credit. I don't know enough about tax law to know if a fed credit like that can be taken away in the middle of a tax year, but this administration is likely to do anything.

    Hypothetically, I'm actually for the fed tax credits going away. I feel like the early innovators (Tesla, GM, Nissan) deserved the credit and it makes no sense to now reward those who were sitting on the sidelines all that time. However, when you look at it in practice as a $7500 price increase on the vehicle, it's tough not to be a little upset.
     
  18. Deans

    Deans Member

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    I don't think it will go away due to politics. Very safe bet that the credit will be here until they hit 200,000 sales. Then you have 1 more quarter to take delivery before it starts getting reduced. So probably 1 quarter after M3 gets here.
    No real chance of Trump pulling the plug before then.
     
  19. theheff

    theheff Member

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    I just ordered a 100D and spoke with my owner adviser. It sounds like they're still waiting on the Colorado Department of Revenue to figure out how to apply that up front. In the mean time, the $5000 credit is still applied retroactively by filing for it on taxes.
     
    • Helpful x 1
  20. SageBrush

    SageBrush Active Member

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    I think so, but I am not positive.

    It is my understanding that you report state/local income tax liability on your federal return.
    It makes sense that it is this way since you always have the choice to file estimated sales tax instead, and that is never offset by tax credits or other deductions besides personal exemptions.
     

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