Do tax rebates apply if you lost your car?

[mhmhsh]

My insurance declared my Model 3 a total loss (repair costs are too much). I live in Colorado where there is $5000 tax rebate from the state. Will I be eligible to get this rebate next year even though I only owned the car for two months before the loss accident?

Also does the state rebate apply for multiple car purchases per person? So if I bought another Model 3 this year, does that mean I get $10,000 total in tax rebate next year? ($5000 for the lost model 3, and $5000 for the new model 3)

 

[lolder]

Rebates should be valid as of the purchase date.

 

[rickdogg82]

This is an interesting question. California's rebate requires that you must " Retain ownership of the vehicle in California for a minimum of 30 consecutive months immediately after the vehicle purchase or lease date".

Fine print:
"*Note: CARB verifies vehicle ownership through periodic checks of Vehicle Identification Numbers (VINs) in the California DMV database. If a vehicle purchaser or lessee sells or returns the rebated vehicle to the dealer, CARB or its designee reserves the right to recoup CVRP funds from the original vehicle purchaser identified on the rebate form and may pursue other remedies available under the law for unauthorized early termination of vehicle ownership."

It does not mention insurance loss so it probably does not apply. But I think most people have no idea they must keep the car for a specified time or return the rebate $.\

 

[SSedan]

If the replacement was new I would think you could claim on that one or the other.
Both would be a clear abuse of the system.

 

[davewill]

For the federal tax rebate, it's clear that you would get both (assuming you have the tax liability to claim it).

 

[MountainJedi]

For Colorado, I don't see any limitation on this FYI from the DOR: https://www.colorado.gov/pacific/sites/default/files/Income69.pdf (admittedly, I read it quickly and didn't really dig through it).

I think you are able to claim it and would also be able to claim a second vehicle if you replace it with a qualifying vehicle (assuming you had enough state tax liability).

 

[trm2]

This is an interesting question. California's rebate requires that you must " Retain ownership of the vehicle in California for a minimum of 30 consecutive months immediately after the vehicle purchase or lease date".

Fine print:
"*Note: CARB verifies vehicle ownership through periodic checks of Vehicle Identification Numbers (VINs) in the California DMV database. If a vehicle purchaser or lessee sells or returns the rebated vehicle to the dealer, CARB or its designee reserves the right to recoup CVRP funds from the original vehicle purchaser identified on the rebate form and may pursue other remedies available under the law for unauthorized early termination of vehicle ownership."

It does not mention insurance loss so it probably does not apply. But I think most people have no idea they must keep the car for a specified time or return the rebate $.\

Well, you are technically selling the car to the insurance company. If they check, they will see a change in registration.

 

[Puddles]

I know this is a legal question but ethically it seems like you could be double dipping. After all, the insurance payout was based on the cost of the car before rebate, yes?

 

[davewill]

I know this is a legal question but ethically it seems like you could be double dipping. After all, the insurance payout was based on the cost of the car before rebate, yes?

Actually, the payout is based on the market value of the car. It may well be that the market value is already taking that tax rebate (which the buyer of a used car won't get) into account...or it may not.

 

[miimura]

Well, you are technically selling the car to the insurance company. If they check, they will see a change in registration.

If you already applied for the CA rebate before the car was written off, you may still get it. However, when you apply for the next one, they will check on the first one and ask you to return a pro-rated portion before they will issue the second one. If you owned the car for 3 months, you would get to keep 10% (3/30ths) or $250 of the $2,500 for the first car. It is also possible that they will run a DMV check just before cutting the check and they will find that you don't own it any more and they won't issue the check. Today, you would be in the wait-list due to the program running out of funds, so you would not even make it out of the wait list into the payment queue if the car had already been written off.

All of the above is California specific and does not address the OP's question about Colorado.

 

[mswlogo]

Actually, the payout is based on the market value of the car. It may well be that the market value is already taking that tax rebate (which the buyer of a used car won't get) into account...or it may not.

Depends on his insurance plan. Many offer 1 year of 100% of what was paid or MSRP or replacement cost. Need to read fine print. Some insurance companies offer 2 years. I think Geico is one of those companies.

 

[Runt8]

For Colorado, I don't see any limitation on this FYI from the DOR: https://www.colorado.gov/pacific/sites/default/files/Income69.pdf (admittedly, I read it quickly and didn't really dig through it).

I think you are able to claim it and would also be able to claim a second vehicle if you replace it with a qualifying vehicle (assuming you had enough state tax liability).

Colorado is a rebate, not a credit, so you don’t need tax liability to get the full amount.

 

[MountainJedi]

Colorado is a rebate, not a credit, so you don’t need tax liability to get the full amount.

No it’s a credit. That’s very clearly described in both the FYI and the Colorado Revised Statutes.

However, according to the CRS, it is a fully refundable credit, so it does act like a rebate in essence. So I revise my earlier statement and you can claim as many vehicles as you purchase without regard to your tax liability.

 

[mhmhsh]

If the replacement was new I would think you could claim on that one or the other.
Both would be a clear abuse of the system.

I do not see the abuse. Sales tax in my area is about $5000 for model 3. So basically the $5000 state rebate is like asking for refund of the sales taxes already paid for each vehicle.

 

[MountainJedi]

I do not see the abuse. Sales tax in my area is about $5000 for model 3. So basically the $5000 state rebate is like asking for refund of the sales taxes already paid for each vehicle.

It's also not abuse, because it's not prohibited by the statute. If CO didn't want people to claim multiple vehicles, they should have written the law that way. Instead they wrote it, and even specified, that it's acceptable to claim multiple vehicles with the appropriate paperwork.

 

[mhmhsh]

For Colorado, I don't see any limitation on this FYI from the DOR: https://www.colorado.gov/pacific/sites/default/files/Income69.pdf (admittedly, I read it quickly and didn't really dig through it).

I think you are able to claim it and would also be able to claim a second vehicle if you replace it with a qualifying vehicle (assuming you had enough state tax liability).

Thanks for the link. Yes, I checked it out and did not see any rules regarding the duration of ownership for rebate eligibility. Hmmm, does that mean if someone bought an EV in CO and the next day sold it, s/he would get the $5000 tax rebate?

 

[MorrisonHiker]

You can get the Colorado tax credit multiple times. We've gotten it 7 times so far and will be claiming it at least once when filing our taxes again next year.

Technically, I don't think you can buy it with the intention of selling it but if you change your mind and have buyer's remorse and then decide to sell it, it isn't a problem.

 

[ry-ballz]

The biggest hurdle is Colorado wants the vehicle registered for the rebate. So if it was totalled while you had temp tags still it might be an issue.

 

[Galve2000]

I think Geico is one of those companies.

Geico does not offer "new car replacement" which is i believe the insurance product you are talking about. At least not in NY State. I know b/c I asked for it when I got my Model S in 2015 and almost went with a different insurance company b/c they did not offer it.

 

[MountainJedi]

Thanks for the link. Yes, I checked it out and did not see any rules regarding the duration of ownership for rebate eligibility. Hmmm, does that mean if someone bought an EV in CO and the next day sold it, s/he would get the $5000 tax rebate?

As noted above, you have to title and register it within Colorado. If you hadn't had your permanent registration yet, I think you can argue you're still eligible based upon your temporary registration and intent to title. Actually I think they'd have to issue a title to transfer the car to your insurance company so I think you'd be OK either way.