WMTribe90
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Location: Louisville, CO

Good News for EV purchasers in Colorado

Thu May 16, 2013 4:30 pm

New legislation (CO HB1247) just signed into law by Governor Hickenlooper extends the state Innovative Vehicle Tax Credit through 2012. Current credit would have expired in 2015. Separate legislation imposes a $50 annual fee on EV owners, but $20 of that will go to fund public charging infrastructure. The new legislation also simplifies how the EV credit will be calculated using a percentage of the vehicle cost minus any federal credits.

I believe this is the pertinent language for potential EV buyers.

(a) Category 1. (I) WITH RESPECT TO THE TAX YEARS COMMENCING
ON OR AFTER JANUARY 1, 2013, BUT PRIOR TO JANUARY 1, 2019, THE
ACTUAL COST INCURRED BY THE TAXPAYER DURING THE TAX YEAR FOR
PURCHASING OR LEASING A CATEGORY 1 MOTOR VEHICLE MULTIPLIED BY
THE BATTERY CAPACITY OF THE MOTOR VEHICLE AND DIVIDED BY ONE
HUNDRED;

Credit would start to phase out between 2019 and 2021.

Purchased my Leaf in April, so I'm not sure if I'm covered under the new calculation outlined above or the old legislation/calculation. This section of the bill would seem to contradict the above language with respect to 2013 EV purchasers in Colorado.

(c) Current statute sets appropriate levels of tax credits for each
vehicle type for tax year 2013, and the new methodology for calculating tax
credits is designed to simplify the administration of the tax credits and
facilitate the understanding of the tax credits by the general public, while
reproducing similar levels of credit for each vehicle type as existing statute;

Either way, generally very good news. Full bill text here;

http://legiscan.com/CO/text/HB1247/2013" onclick="window.open(this.href);return false;

cgaydos
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Leaf Number: 009493025635
Location: Monument, Colorado

Re: Good News for EV purchasers in Colorado

Thu May 16, 2013 5:20 pm

Thanks for posting this!

I'm still trying to figure out what it all means, but here is a summary of the highlights:

Specifically, HB 1274 will:
» Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
» Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
» Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Source: http://energypolicyinfo.com/2013/05/col ... n-hybrids/

It's good that PHEVs get the credit again - the main reason I stopped considering a Volt for my second EV was the loss of that credit in 2013.

Regarding the $50 registration fee for EVs apparently the EV lobbyists like it. The idea is that this should preempt the movements we've seen in other states to impose higher fees or worse, mileage tracking. At some level I agree that EVs should contribute to highway maintenance, but at this point many of these programs are designed to be punative and introduce administrative costs that are higher than the fees being collected. The $50 surcharge, using existing tax infrastructure, with $20 going to charging infrastructure, makes sense.

What I'm trying to figure out is what this does to the LEAF credits for TY 2013 and beyond under the new credit calculation.
Red Leaf: 2012 SL, lease, acquired 21 November 2012
Blue Leaf: 2011 SL, purchase (new, was dealer demo), acquired 4 March 2013

cgaydos
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Re: Good News for EV purchasers in Colorado

Thu May 16, 2013 5:57 pm

Ok I've read it for LEAFs, and here's my first take. This is for discussion only - by all means wait for the updated tax publication from Colorado for the actual numbers. In short, it appears that the Colorado LEAF credit is now better for purchasers - potentially back up to $6k for buyers of the high end models, but a lot less for people who lease a LEAF.

For newly purchase EVs take the MSRP, subtract the $7500 federal credit and any other "grants or rebates" and that is your actual cost. Then take actual cost, multiply by battery capacity in kwh and divide by 100 for your credit, not to exceed $6k. I am assuming, therefore, that manufacturer rebates to customers are factored in but not rebates to dealers. Battery capacity is defined as 100% to 0%, but it's not clear whether that is usable as limited by car computers or actual what the batteries can do - I'm assuming the latter so for LEAFs that would be 24. It does not appear that delivery charge or sales tax are included in the actual cost.

An example would be a S model with an MSRP of $28500 and no rebates to the consumer. The credit would be, as I read this, based on: 1) actual cost of $28500-$7500 federal tax credit = $21k, 2) multiply by 24 and divide by 100 = $5040. But for more expensive models or an S with options the credit would be higher. For this reason in most cases *purchasers* of the LEAF should be getting more of a credit than before, UNLESS they use something like 21 kwh as the battery capacity.

For leases it gets really complicated, basically you total up your payments, including down payment, then have to subtract all the taxes, rent charge, admin fees, disposition fee (if included in payments), to get the actual cost. As each lease is different the calculation is different. However, I believe this will result in a much lower credit for people LEASING a LEAF. As an example, last year I claimed almost $2k (and got the refund as a result) - the same lease would yield under $1200 under the new law.

One area not addressed is the effect on people who bought or leased earlier in 2013 under the previous law. As it reads the new law applies regardless, but in the past they've made allowances for people who bought under old guidance even if that turned out to be wrong or changed. For me, having bought a new 2011 (in March, 2013 at a very low price) the net change is actually positive (this is a re-edit from what I first posted) because the credit is based on MSRP, which was $35,440, not on cost actually paid. In fact I will top out at the $6k limit for the credit.

The other question is used cars. As before, no car can get the same credit twice, but you can buy a used car from out-of-state and claim the credit. In most scenarios the credit is better under this law for a used LEAF from another state. Previously you took the credit ($4815) and pro-rated based on what you paid relative to the MSRP. Since the MSRP was before the federal tax rebate your used LEAF is likely to be 60% or less of the MSRP. Under the new law you calculate based on the actual cost of the car to you (interestingly, in the used car clause sales taxes are not excluded from actual cost unlike the other sections - you might even be able to justify the transport costs as part of the actual cost under the wording here) then use the *24 /100 calculation. So, for a $21k used LEAF you'd get a $5040 credit as noted above (with all the assumptions listed there).
Red Leaf: 2012 SL, lease, acquired 21 November 2012
Blue Leaf: 2011 SL, purchase (new, was dealer demo), acquired 4 March 2013

WMTribe90
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Re: Good News for EV purchasers in Colorado

Thu May 16, 2013 8:52 pm

cgaydos wrote:Ok I've read it for LEAFs, and here's my first take. This is for discussion only - by all means wait for the updated tax publication from Colorado for the actual numbers. In short, it appears that the Colorado LEAF credit is now better for purchasers - potentially back up to $6k for buyers of the high end models, but a lot less for people who lease a LEAF.

For newly purchase EVs take the MSRP, subtract the $7500 federal credit and any other "grants or rebates" and that is your actual cost. Then take actual cost, multiply by battery capacity in kwh and divide by 100 for your credit, not to exceed $6k. I am assuming, therefore, that manufacturer rebates to customers are factored in but not rebates to dealers. Battery capacity is defined as 100% to 0%, but it's not clear whether that is usable as limited by car computers or actual what the batteries can do - I'm assuming the latter so for LEAFs that would be 24. It does not appear that delivery charge or sales tax are included in the actual cost.

An example would be a S model with an MSRP of $28500 and no rebates to the consumer. The credit would be, as I read this, based on: 1) actual cost of $28500-$7500 federal tax credit = $21k, 2) multiply by 24 and divide by 100 = $5040. But for more expensive models or an S with options the credit would be higher. For this reason in most cases *purchasers* of the LEAF should be getting more of a credit than before, UNLESS they use something like 21 kwh as the battery capacity.

For leases it gets really complicated, basically you total up your payments, including down payment, then have to subtract all the taxes, rent charge, admin fees, disposition fee (if included in payments), to get the actual cost. As each lease is different the calculation is different. However, I believe this will result in a much lower credit for people LEASING a LEAF. As an example, last year I claimed almost $2k (and got the refund as a result) - the same lease would yield under $1200 under the new law.

One area not addressed is the effect on people who bought or leased earlier in 2013 under the previous law. As it reads the new law applies regardless, but in the past they've made allowances for people who bought under old guidance even if that turned out to be wrong or changed. For me, having bought a new 2011 (in March, 2013 at a very low price) the net change is actually positive (this is a re-edit from what I first posted) because the credit is based on MSRP, which was $35,440, not on cost actually paid. In fact I will top out at the $6k limit for the credit.

The other question is used cars. As before, no car can get the same credit twice, but you can buy a used car from out-of-state and claim the credit. In most scenarios the credit is better under this law for a used LEAF from another state. Previously you took the credit ($4815) and pro-rated based on what you paid relative to the MSRP. Since the MSRP was before the federal tax rebate your used LEAF is likely to be 60% or less of the MSRP. Under the new law you calculate based on the actual cost of the car to you (interestingly, in the used car clause sales taxes are not excluded from actual cost unlike the other sections - you might even be able to justify the transport costs as part of the actual cost under the wording here) then use the *24 /100 calculation. So, for a $21k used LEAF you'd get a $5040 credit as noted above (with all the assumptions listed there).
Your interpretation of how the new credits will be calculated is how I took it as well. I hope your are right and I get to claim my credit for my 2013 Leaf using the new credit methodology. I'm looking at a 5,400 credit with the new calculation. Old calculation yielded $4600 for fy 2012. Probably would be less for 2013. Makes no sense that the 2014 purchasers would get a higher credit when they cam make the law retro active to January 1, 2013.

I' m fine with the $50 fee. EV users should still contribute to road construction/maintenance and if it also leads to getting some public QC stations along the major highways that goog bang for the buck.

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dgpcolorado
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Re: Good News for EV purchasers in Colorado

Fri May 17, 2013 11:34 am

Interesting report, thanks WMTribe90! I'm not "plugged-in" (so-to-speak) to the Denver news scene so I wasn't aware of the new laws.

The EV registration fee law: HB1110 The relevant part is near the end, CRS 42-3-304. Registration fees:
42-3-304. Registration fees - passenger and passenger-mile taxes - clean screen fund - definitions - repeal.
(25) (a) BEGINNING JANUARY 1, 2014, IN ADDITION TO ANY OTHER FEE IMPOSED BY THIS SECTION, COUNTY CLERKS AND RECORDERS SHALL ANNUALLY COLLECT A FEE OF FIFTY DOLLARS AT THE TIME OF REGISTRATION ON EVERY PLUG-IN ELECTRIC MOTOR VEHICLE . COUNTY CLERKS AND RECORDERS SHALL TRANSMIT THE FEE TO THE STATE TREASURER, WHO SHALL CREDIT THIRTY DOLLARS OF EACH FEE TO THE HIGHWAY USERS TAX FUND CREATED IN SECTION 43-4-201, C.R.S., AND TWENTY DOLLARS OF EACH FEE TO THE ELECTRIC VEHICLE GRANT FUND CREATED IN SECTION 24-38.5-103, C.R.S.

(b) THE DEPARTMENT OF REVENUE SHALL CREATE AN ELECTRIC VEHICLE DECAL, WHICH A COUNTY CLERK AND RECORDER SHALL GIVE TO EACH PERSON WHO PAYS THE FEE CHARGED UNDER PARAGRAPH (a) OF THIS SUBSECTION (25). THE DECAL MUST BE ATTACHED TO THE UPPER RIGHT-HAND CORNER OF THE FRONT WINDSHIELD ON THE MOTOR VEHICLE FOR WHICH IT WAS ISSUED. IF THERE IS A CHANGE OF VEHICLE OWNERSHIP, THE DECAL IS TRANSFERABLE TO THE NEW OWNER.

(c) AS USED IN THIS SECTION, "PLUG-IN ELECTRIC MOTOR VEHICLE" MEANS:

(I) A MOTOR VEHICLE THAT HAS RECEIVED AN ACKNOWLEDGMENT OF CERTIFICATION FROM THE FEDERAL INTERNAL REVENUE SERVICE THAT THE VEHICLE QUALIFIES FOR THE PLUG-IN ELECTRIC DRIVE VEHICLE CREDIT SET FORTH IN 26 U.S.C. SEC. 30D, OR ANY SUCCESSOR SECTION; OR

(II) ANY MOTOR VEHICLE THAT DRAWS ELECTRICITY FROM A BATTERY THAT IS CAPABLE OF BEING CHARGED FROM AN EXTERNAL SOURCE.
I wonder what the purpose of the windshield decal is?

I don't have a problem with the $50 annual fee: I like it! However, all the charge station money will likely go to the Front Range—although any local government can apply for a grant, something I plan to point out to my local communities here. Nevertheless, if charge stations benefit EV adoption in general I'm all for it. The text of the legislation that sets up the fund:
CRS 24-38.5-103. Electric vehicle grant fund - creation - administration.
(1) There is hereby created in the state treasury the electric vehicle grant fund, referred to in this section as the "fund". The fund shall be used to provide grants to local governments, LANDLORDS OF MULTI-FAMILY APARTMENT BUILDINGS, AND THE UNIT OWNERS' ASSOCIATIONS OF COMMON INTEREST COMMUNITIES AS DEFINED IN ARTICLE 33.3 OF TITLE 38, C.R.S., to install recharging stations for electric vehicles. The grants shall be prioritized based upon the local government's PROSPECTIVE RECIPIENTS' POTENTIAL FOR, AND commitment to, energy efficiency.
Another interesting law for renters or condo owners: SB126. (CRS 38-12-601. Unreasonable restrictions on electric vehicle charging systems). It prohibits restrictions on the installation of charge stations by tenants or condo owners. (This is similar in spirit to the 1970s law the prohibits unreasonable restrictions by HOAs on the installation of solar panels by property owners.)
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cgaydos
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Re: Good News for EV purchasers in Colorado

Fri May 17, 2013 4:41 pm

dgpcolorado wrote:
... ANNUALLY COLLECT A FEE OF FIFTY DOLLARS AT THE TIME OF REGISTRATION ON EVERY PLUG-IN ELECTRIC MOTOR VEHICLE.
Interesting because I notice the title on my 2011 LEAF indicates fuel is "GAS" not "ELECTRIC". I called the state SOS and they said the local DMV office has to fix it. I think now I'll let it stay as is and see if they remember the $50 fee at renewal time next year. :D
dgpcolorado wrote:I wonder what the purpose of the windshield decal is?
It doesn't say so explicitly but the context seems to indicate that the decal is renewed annually thus it indicates the fee has been paid this year - useful for resale of the vehicle. I gather the same approach is used for emissions certifications in the Denver area, but I'm not sure as we don't have those certifications down here.
Red Leaf: 2012 SL, lease, acquired 21 November 2012
Blue Leaf: 2011 SL, purchase (new, was dealer demo), acquired 4 March 2013

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dgpcolorado
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Re: Good News for EV purchasers in Colorado

Fri May 17, 2013 5:39 pm

cgaydos wrote:
dgpcolorado wrote:I wonder what the purpose of the windshield decal is?
It doesn't say so explicitly but the context seems to indicate that the decal is renewed annually thus it indicates the fee has been paid this year - useful for resale of the vehicle. I gather the same approach is used for emissions certifications in the Denver area, but I'm not sure as we don't have those certifications down here.
I suppose that could be the case (no emissions stuff here either) but why would anyone care? You can't renew your license plate without paying registration fees so having a current plate sticker means all is taken care of. I'm just curious as to the rationale for the sticker. Probably ought to contact whoever wrote the bill.
Blue 2012 SV Dec 2011 to Feb 2016
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dgpcolorado
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Re: Good News for EV purchasers in Colorado

Tue Jul 30, 2013 3:04 pm

The new formula is written in such a way that purchasers in 2013 might not get the full $6000 unless the price paid is on the high side. And it isn't clear whether the old or new formula applies because of a conflict in wording, although it is clear that the intent of the new law was that the new formula applies:
HOUSE BILL 13-1247
(a) Category 1. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2019, the actual cost incurred by the taxpayer during the tax year for purchasing or leasing a category 1 motor vehicle multiplied by the battery capacity of the motor vehicle and divided by one hundred;
For example, a purchase of the S model at MSRP: ($28,800 - $7500) x 24/100 = $5112

FWIW
Blue 2012 SV Dec 2011 to Feb 2016
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cgaydos
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Re: Good News for EV purchasers in Colorado

Tue Jul 30, 2013 4:35 pm

dgpcolorado wrote:The new formula is written in such a way that purchasers in 2013 might not get the full $6000 unless the price paid is on the high side. And it isn't clear whether the old or new formula applies because of a conflict in wording, although it is clear that the intent of the new law was that the new formula applies:
HOUSE BILL 13-1247
(a) Category 1. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2019, the actual cost incurred by the taxpayer during the tax year for purchasing or leasing a category 1 motor vehicle multiplied by the battery capacity of the motor vehicle and divided by one hundred;
For example, a purchase of the S model at MSRP: ($28,800 - $7500) x 24/100 = $5112

FWIW
Thanks for pointing this out. Certainly an S trim level is not likely to get the full $6k credit.

But a key point here is that for new purchases the MSRP is defined as the "actual cost incurred", NOT what you negotiate as the car price. This is not true for used cars or for leases. What this means is that if you manage to negotiate a significant discount below MSRP (before any Nissan incentives or rebates) you still get the MSRP as the basis of the tax credit. This can be a big advantage when you are buying a leftover car from a previous model year. Of course, if you pay over MSRP you'll get just the MSRP for the credit - probably that was the reason the law was written this way.

What we *really* need is an update of tax publication 67 to clarify all of this.
Red Leaf: 2012 SL, lease, acquired 21 November 2012
Blue Leaf: 2011 SL, purchase (new, was dealer demo), acquired 4 March 2013

Leafdom
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Re: Good News for EV purchasers in Colorado

Tue Feb 04, 2014 6:50 am

Does anyone have an update on a 2013 lease? The schedule only provides numbers for 2011 and 2012, but for 2013 it says you can use either method to determine your lease credit. I think using the older method yields more of a return but they do not provide the 2013 value. Anyone else trying to figure this out? I have tried to call the tax office but have been on endless hold for hours.

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