Negotiating on CPO

[FlasherZ]

In Colorado, the $6000 state tax credit applies to CPO vehicles that have not previously been registered in Colorado. Because of this, I would suggest considering CPOs outside of Colorado and confirming they weren't originally from Colorado. The $7500 federal tax credit would not apply since it can only be claimed on new cars. There's another thread somewhere that mentions Colorado considers cars to be used if they have more than 1500 miles on them...so the federal credit wouldn't be available.

Federal law is different than state law, and it's unclear that the federal credit isn't available. The IRS says that the "original use" of the vehicle must "commence with the taxpayer".

It's unlikely that Tesla would claim the IRS tax credit on an inventory car, and so it's likely that you could claim the credit without raising flags. While Regulation 12-6-102 of Colorado's Motor Vehicle laws & regulations requires dealers to title any demonstrator over 1,500 miles in their name and then transfer it as a used car, it would create an equal treatment problem across all the other states that don't require this practice should you get audited on that credit.

 

[MorrisonHiker]

Federal law is different than state law, and it's unclear that the federal credit isn't available. The IRS says that the "original use" of the vehicle must "commence with the taxpayer".

It's unlikely that Tesla would claim the IRS tax credit on an inventory car, and so it's likely that you could claim the credit without raising flags. While Regulation 12-6-102 of Colorado's Motor Vehicle laws & regulations requires dealers to title any demonstrator over 1,500 miles in their name and then transfer it as a used car, it would create an equal treatment problem across all the other states that don't require this practice should you get audited on that credit.

Yeah, that's where the confusion is as the state law could prevent one from getting the federal tax credit. Previously, it was believed the Inventory models could get both the $6000 state and $7500 federal...but then someone pointed out that Colorado considers cars with over 1500 miles to be used and that was news to many.

I was considering an Inventory model until I heard about the 1500 mile "limit". Now, I'm just waiting on the X to be released. If I decided to move my deposit to an S, I'll either get a new one, only consider an Inventory model with fewer than 1500 miles, or just go CPO and forget about the federal credit.

It might be possible to still get the federal tax credit legally but I'm not going to bet $7500 on it.

 

[HankLloydRight]

I don't see how the federal tax credit would not apply. As long as the inventory vehicles are not previously titled, they qualify for the federal tax credit. Just because Colorado might declare a vehicle not eligible for the state credit has no bearing on what the IRS rules are. As far as Tesla is concerned, all inventory cars are unsold/untitled cars are all are eligible for the Federal tax credit.

 

[MorrisonHiker]

I don't see how the federal tax credit would not apply. As long as the inventory vehicles are not previously titled, they qualify for the federal tax credit. Just because Colorado might declare a vehicle not eligible for the state credit has no bearing on what the IRS rules are. As far as Tesla is concerned, all inventory cars are unsold/untitled cars are all are eligible for the Federal tax credit.

It would still be eligible for the state credit as a used car. The federal tax credit only applies for new cars. In order to register a car with more than 1500 miles in Colorado, it would have to be registered as a used car. Technically you might still be able to apply for the federal tax credit. A Tesla Park Meadows manager mentioned the 1500 mile limit to a potential customer and informed them that it wouldn't be eligible for the federal tax credit, IIRC.

Here's the other post where this was brought up.

I would think/hope that it was still eligible for both tax credits but I'm not going to be the guinea pig. Hopefully someone else who has purchased an Inventory model can chime in and let us know if they were able to claim the federal tax credit. There's no question about the state tax credit as long as the car wasn't previously registered in Colorado.

 

[HankLloydRight]

The IRS only checks to see if the VIN had been previously claimed for the credit, assuming every new buyer is going to submit it for the tax credit, including leasing companies. They're not going to scrutinize each state's records of new vs. used car registrations.


*unless Tesla registers/titles the cars themselves first and claims the tax credit.

. A Tesla Park Meadows manager mentioned the 1500 mile limit to a potential customer and informed them that it wouldn't be eligible for the federal tax credit, IIRC.

It wouldn't be the first time a Tesla employee disseminated incorrect information. I definitely would *not* rely on that as gospel. You have no idea where he got his information from, of it he just decided himself that the tax credit was not available.

 

[FlasherZ]

The Colorado regulation says that Tesla must title the car to themselves at 1,500 miles.

Even then, though, the IRS doesn't look for registration records - they merely look for whether someone claimed the credit for the VIN listed, and at the model year.

 

[HankLloydRight]

The Colorado regulation says that Tesla must title the car to themselves at 1,500 miles.

Sure, but do they?

 

[MorrisonHiker]

Sure, but do they?

No, according to this post :

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.

It would be nice if we could hear from someone in Colorado who was able to claim both tax credits on an inventory model with more than 1500 miles on it

 

[2krazykats]

Went to my test drive today and of course, it was awesome! I got to liberally use my lead foot and was impressed with the quick response. Someone mentioned the lack of center console in a different thread and there is one, albeit small. You can buy an after-market console which will add more storage and charging your phone but I couldn't remember if it was 12-volt or USB.

There is quite a list of inventory cars for sale right now with discounts anywhere from $700 to ~several thousand. I was surprised at some of the models with such low miles and one had only 50 miles! I'm not sure why these cars would be rotating out already when they've got so few miles. It was explained to me that they were moving the cars so they could get in the newer models and the eagerly anticipated X. The showroom guys had about as much info about when the X was coming as I did by searching the Internet.

I wasn't ready to bite just yet as I wanted to think it over so he sent me a couple of cars that are in the configuration I wanted. Still doing research on the tax breaks for fed and CO. I also want to come back and drive it when the snow is on the ground so that will be a few more months.