2013 Colorado Tax Credit Guidance Doc Released

[WMTribe90]

Colorado has released the new guidance doc for calculating tax credits under the Innovative Motor Vehicle and Alternative Fuel program. Gone is the comparable vehicle price difference based calculation for 2013. For purchases, its a straight up calculation that uses the MSRP as the starting point. For my 2013 S model with charger package (MSRP ~$30,000) the State tax credit comes to ~$5,500 of the available $6,000 max.

So, with the Federal tax credit, the actual purchase price for a new S model Leaf is less than $17,000. If I were Nissan I would be running ads in Colorado (and other States with significant credits) spelling out the math. Very few potential buyers realize just how affordable this car can be.

http://www.colorado.gov/cms/forms/dor-tax/Income67.pdf" onclick="window.open(this.href);return false;

 

[dgpcolorado]

Thanks for posting that, interesting reading. My take on the language is a bit different from yours. It says:

The MSRP for the base model of the vehicle, without any optional features or equipment, is used to calculate the credit.

That suggests to me that the MSRP for the S model itself is used for all LEAF calculations, regardless of options or upgrades. That would be $28,800, for a credit of ($28,800 - $7500) x 0.24 = $5112.

 

[WMTribe90]

Thanks for posting that, interesting reading. My take on the language is a bit different from yours. It says:

The MSRP for the base model of the vehicle, without any optional features or equipment, is used to calculate the credit.

That suggests to me that the MSRP for the S model itself is used for all LEAF calculations, regardless of options or upgrades. That would be $28,800, for a credit of ($28,800 - $7500) x 0.24 = $5112.

I think you are reading that correctly. I found the document late last night and skimmed it quickly. Still a good deal. Wish Nissan had included the charger package in the base mode S though. That's equipment directly related to the functionality of the electric vehicle, unlike a Bose speakers and cruise control.

 

[cgaydos]

If I were Nissan I would be running ads in Colorado (and other States with significant credits) spelling out the math. Very few potential buyers realize just how affordable this car can be.

Nissan does run ads on-line in Colorado - but with the $6k credit value. I notified them back in December that the credit was only $4815 (which it was under the old plan) and they stopped the ads, but restarted after the credit was revised. They probably should change it to $5112 per the note above.

Note that if you bought a 2012 LEAF in 2013 you'll get the full $6k credit, since the 2012 base model was the SV with a much higher MSRP. Note also that if you lease in 2013 you can still use the old formula for the credit, which in most cases will be more than twice as much as the new formula - over $2k in most cases for SV/SL (depends on selling price in the contract and the residual) under the old formula. In 2014 only the new formula applies.

 

[stusf]

Do you have any reference for the increased valuation on the 2012 Leaf? The FYI 67 doc only has the one incremental price difference.

Thanks!

 

[reeler]

Anyone getting the run-around from Colorado on their 2012 taxes? I filed for the $6K credit and they are peppering me with rejections. First, I didn't include the registration. Next, my RAV4EV isn't on "the list" of approved cars so cannot qualify.

The list they have published is not exhaustive and is always missing some models. Maybe, the shenanigans will end and they will stop fighting me.

 

[cgaydos]

Anyone getting the run-around from Colorado on their 2012 taxes? I filed for the $6K credit and they are peppering me with rejections. First, I didn't include the registration. Next, my RAV4EV isn't on "the list" of approved cars so cannot qualify.

The list they have published is not exhaustive and is always missing some models. Maybe, the shenanigans will end and they will stop fighting me.

I had no problem with the LEAF. I included a copy of the lease with the key numbers circled as an exhibit and got the refund right away.

 

[cgaydos]

Do you have any reference for the increased valuation on the 2012 Leaf? The FYI 67 doc only has the one incremental price difference.

Thanks!

67 has to be read carefully. Pages 3-5 talk about tax years 2010-2013. Page 6 & 7 talks about tax years 2013-2021. Note that 2013 is mentioned twice - if you buy a car in 2013, even a car from an earlier model year, you can use either tax method. The table on page 16 applies only to the earlier tax method. Go through the numbers on page 6 & 7 on the 2012 LEAF and you'll get the higher tax credit.

 

[BoulderLeaf]

Anyone getting the run-around from Colorado on their 2012 taxes? I filed for the $6K credit and they are peppering me with rejections. First, I didn't include the registration. Next, my RAV4EV isn't on "the list" of approved cars so cannot qualify.

The list they have published is not exhaustive and is always missing some models. Maybe, the shenanigans will end and they will stop fighting me.

I had some problems at first (never rejections, just long delays over "missing" paperwork). After re-submitting much of the documentation it was approved but it took a while.

I was told that all 2012 refunds were delayed due to some extra scrutiny on the returns. I don't know the details on that but mine eventually came.

 

[BoulderLeaf]

Can anyone walk through an example of how a rebate would be calculated on a lease in 2013? I see the appropriate worksheets, but I've never actually leased before.

Thanks!

 

[cgaydos]

Can anyone walk through an example of how a rebate would be calculated on a lease in 2013? I see the appropriate worksheets, but I've never actually leased before.

Thanks!

It's very complicated. So, if your lease starts in 2013 you can use either the old tax credit formula (applies to tax years 2010-2013) or the new formula (applies to tax years 2013-2021). Note that this is tax year - that is when you start the lease - not model year. If you lease a model year 2013 LEAF starting in January 2014 then you have to use the new tax credit formula.

This is important because in most cases the old formula yields a better credit for leases. I assume you have Publication 67, version 9/13 (if not, download it). For the old formula there is a bit of a problem in that the New Incremental Price Difference table on page 16 does not list a 2013 Nissan LEAF, just the 2011 and 2012. Is it the same for a 2013? I'm going to assume that for the example here, but if I were leasing I'd call the tax office and verify first.

So, assume an Incremental Price Difference for $13,920 (from page 16). Then, using worksheet 1.1 on page 3 you subtract the federal credit of $7500, subtract any other credits or rebates you get (assume $0 for now - this doesn't include dealer discounts) and by line 5 you have $6420.

For leased vehicles you have to got to worksheet 1.3 on page 4 to figure out the lease factor. Line 1 is the agreed value of the vehicle which is usually the top line in your lease contract. It won't be the MSRP, it will include options, etc. Line 4 is the residual, which will be listed later in your leased contract. Worksheet 1.3 basically works out the percentage of the total agreed value that you will be paying with your lease - that percentage is what is eligible for the credit.

Back on worksheet 1.1 the one calculation you have left is to apply the tax credit percentage, which will be 75%. If you buy the LEAF the old formula would yield $6420 * 75% = $4815. If you lease you get the percentage of that which is your lease factor.

To calculate the credit on the new tax formulas you instead use worksheets 1.6 and 1.7. If you buy the LEAF, you just use worksheet 1.6. You start with the MSRP, but the trick is that this is not the MSRP for your car but instead the MSRP for the base model for with no options. For the 2013 LEAF this is $28,800. (For earlier model years the base MSRP for the LEAF was much higher, which is why they would yield a higher credit if bought new in 2013.) Subtract the $7500 federal credit to get $21,300. For line 6 use 24 - the battery capacity. Then doing the math you end up with a credit of $5112.

So that's the new formula credit for buying a 2013 LEAF. For leasing you use the same worksheet (1.6) but replace the MSRP in line 1 with the result of worksheet 1.7. In line 1 of worksheet 1.7 you total all of your lease payments, including a downpayment. In lines 2 through 8 you itemize all the parts of your payments that won't count toward the tax credit - this includes anything refundable, any taxes or fees, and any interest ("rent charge"). The net difference is shown in line 10. When you get back to worksheet 1.6 remember not to include the $7500 federal tax credit since that will have already applied to your lease. The exact values depend entirely on your lease contract.

Every lease situation will yield a different tax credit. But as an example, my 2012 LEAF lease yielded a tax credit of $1940 under the old tax formula. Under the new formula it would have been slightly less than $1000.

 

[BoulderLeaf]

Can anyone walk through an example of how a rebate would be calculated on a lease in 2013? I see the appropriate worksheets, but I've never actually leased before.

Thanks!

It's very complicated. So, if your lease starts in 2013 you can use either the old tax credit formula (applies to tax years 2010-2013) or the new formula (applies to tax years 2013-2021). Note that this is tax year - that is when you start the lease - not model year. If you lease a model year 2013 LEAF starting in January 2014 then you have to use the new tax credit formula.

This is important because in most cases the old formula yields a better credit for leases. I assume you have Publication 67, version 9/13 (if not, download it). For the old formula there is a bit of a problem in that the New Incremental Price Difference table on page 16 does not list a 2013 Nissan LEAF, just the 2011 and 2012. Is it the same for a 2013? I'm going to assume that for the example here, but if I were leasing I'd call the tax office and verify first.

So, assume an Incremental Price Difference for $13,920 (from page 16). Then, using worksheet 1.1 on page 3 you subtract the federal credit of $7500, subtract any other credits or rebates you get (assume $0 for now - this doesn't include dealer discounts) and by line 5 you have $6420.

For leased vehicles you have to got to worksheet 1.3 on page 4 to figure out the lease factor. Line 1 is the agreed value of the vehicle which is usually the top line in your lease contract. It won't be the MSRP, it will include options, etc. Line 4 is the residual, which will be listed later in your leased contract. Worksheet 1.3 basically works out the percentage of the total agreed value that you will be paying with your lease - that percentage is what is eligible for the credit.

Back on worksheet 1.1 the one calculation you have left is to apply the tax credit percentage, which will be 75%. If you buy the LEAF the old formula would yield $6420 * 75% = $4815. If you lease you get the percentage of that which is your lease factor.

To calculate the credit on the new tax formulas you instead use worksheets 1.6 and 1.7. If you buy the LEAF, you just use worksheet 1.6. You start with the MSRP, but the trick is that this is not the MSRP for your car but instead the MSRP for the base model for with no options. For the 2013 LEAF this is $28,800. (For earlier model years the base MSRP for the LEAF was much higher, which is why they would yield a higher credit if bought new in 2013.) Subtract the $7500 federal credit to get $21,300. For line 6 use 24 - the battery capacity. Then doing the math you end up with a credit of $5112.

So that's the new formula credit for buying a 2013 LEAF. For leasing you use the same worksheet (1.6) but replace the MSRP in line 1 with the result of worksheet 1.7. In line 1 of worksheet 1.7 you total all of your lease payments, including a downpayment. In lines 2 through 8 you itemize all the parts of your payments that won't count toward the tax credit - this includes anything refundable, any taxes or fees, and any interest ("rent charge"). The net difference is shown in line 10. When you get back to worksheet 1.6 remember not to include the $7500 federal tax credit since that will have already applied to your lease. The exact values depend entirely on your lease contract.

Every lease situation will yield a different tax credit. But as an example, my 2012 LEAF lease yielded a tax credit of $1940 under the old tax formula. Under the new formula it would have been slightly less than $1000.

Wow, thank you very much!