2016 Colorado Revised Statutes
Title 39 - Taxation
Specific Taxes
Article 22 - Income Tax
Part 5 - Special Rules
§ 39-22-516.7. Tax credit for innovative motor vehicles - definitions - repeal

CO Rev Stat ยง 39-22-516.7 (2016) What's This?

(1) As used in this section, unless the context otherwise requires:

(a) (I) (A) "Actual cost incurred" means the actual cost paid by the purchaser for a used motor vehicle, conversion, or idling reduction technologies minus any credits, grants, or rebates, including federal credits, grants, or rebates for which the purchaser is eligible, but excluding the credit specified in this section.

(A) "Actual cost incurred" means the actual cost paid by the purchaser for a used motor vehicle or conversion minus any credits, grants, or rebates, including federal credits, grants, or rebates for which the purchaser is eligible, but excluding the credit specified in this section.

(B) "Actual cost incurred" means the manufacturer's suggested retail price for a new motor vehicle that a person purchases minus any credits, grants, or rebates, including federal credits, grants, or rebates for which the person is eligible, but excluding the credit specified in this section.

(II) For purposes of a lease, the "actual cost incurred" means the total of payments contracted in the lease for the motor vehicle minus:

(A) Any security deposit included in the total of payments;

(B) The rent charge included in the total of payments;

(C) Any sales tax included in the total of payments;

(D) Any titling and registration fees included in the total of payments;

(E) Any disposition fee included in the total of payments;

(F) Any administrative fee or any other fee that does not reflect the value of the motor vehicle included in the total of payments; and

(G) Any credits, grants, or rebates, including federal credits, grants, or rebates for which the lessee or lessor is eligible, but excluding the credit specified in this section.

(b) "Alternative fuel" means an alternative fuel as defined in section 25-7-106.8 (1) (a), C.R.S.

(c) "Battery capacity" means the quantity of electricity that a battery is capable of storing, expressed in kilowatt hours, as measured from a one hundred percent state of charge to a zero percent state of charge.

(d) "Category 1" means an electric motor vehicle and a plug-in hybrid electric motor vehicle.

(e) "Category 1 A" means a conversion of a motor vehicle to an electric motor vehicle or a plug-in hybrid electric motor vehicle.

(f) "Category 2" means light duty passenger motor vehicle diesel-electric hybrids with a minimum fuel economy of seventy miles per gallon.

(g) "Category 3" means light duty passenger motor vehicle, light duty truck, and medium duty truck diesel-electric hybrid conversions that increase the fuel economy of the original motor vehicle by forty percent or more.

(h) (I) "Category 4" means original equipment manufacturer light duty passenger motor vehicles, light duty trucks, and medium duty trucks that are equipped to operate on compressed natural gas or on liquefied petroleum gas. For purposes of this paragraph (h), "operate on compressed natural gas or on liquefied petroleum gas" means a motor vehicle that operates exclusively on compressed natural gas or on liquefied petroleum gas or a bi-fuel motor vehicle with a multi-fuel engine capable of running on either compressed natural gas or traditional fuel, or either liquefied petroleum gas or traditional fuel.

(II) This paragraph (h) is repealed, effective December 31, 2019.

(i) (I) "Category 4 A" means light duty passenger motor vehicle, light duty truck, and medium duty truck compressed natural gas or liquefied petroleum gas conversions certified by the United States environmental protection agency. For purposes of this paragraph (i), "compressed natural gas or liquefied petroleum gas conversions" means a conversion to a motor vehicle that operates exclusively on compressed natural gas or on liquefied petroleum gas or a bi-fuel motor vehicle with a multi-fuel engine capable of running on either compressed natural gas or traditional fuel, or either liquefied petroleum gas or traditional fuel.

(II) This paragraph (i) is repealed, effective December 31, 2019.

(j) (I) "Category 5" means the installation of any idling reduction technologies on or in a motor vehicle.

(II) This paragraph (j) is repealed, effective December 31, 2019.

(k) "Electric motor vehicle" or "plug-in hybrid electric motor vehicle" means a motor vehicle that:

(I) Has a gross vehicle weight rating that does not exceed eight thousand five hundred pounds;

(II) Has a maximum speed capability of at least fifty-five miles per hour; and

(III) Is propelled to a significant extent by an electric motor that draws electricity from a battery that:

(A) Has a battery capacity of not less than four kilowatt hours; and

(B) Is capable of being recharged from an external source of electricity.

(k.5) "Financing entity" means the entity that finances the purchase or lease of a category 1 or category 1 A vehicle eligible for a credit allowed by this section.

(l) "Gross vehicle weight rating" or "GVWR" shall have the same meaning as set forth in section 42-2-402 (6), C.R.S.

(m) "Hybrid motor vehicle" means a motor vehicle with a hybrid propulsion system that operates on both electricity and an alternative fuel or traditional fuel.

(n) (I) "Idling reduction technologies" means idling reduction devices or advanced insulation, as those terms are defined in section 4053 of the internal revenue code, as amended, exempt from federal excise tax pursuant to said section 4053.

(II) This paragraph (n) is repealed, effective December 31, 2019.

(o) "Light duty passenger motor vehicle" means a private passenger motor vehicle, including vans, capable of seating twelve passengers or less; except that the term does not include motor homes as defined in section 42-1-102 (57), C.R.S., or motor vehicles designed to travel on three or fewer wheels in contact with the ground.

(p) "Light duty truck" means a truck between zero and fourteen thousand pounds GVWR.

(q) "Medium duty truck" means a truck with a gross vehicle weight rating greater than fourteen thousand pounds up to twenty-six thousand pounds.

(r) (I) "Motor vehicle" means, for tax years commencing prior to January 1, 2017, a self-propelled vehicle with four wheels, including a truck and a hybrid motor vehicle, that is:

(A) Titled and registered in the state; and

(B) Required to be licensed or subject to licensing for operation upon the highways of the state.

(II) "Motor vehicle" means, for tax years commencing on or after January 1, 2017, but prior to January 1, 2022, a self-propelled vehicle with four wheels, including a truck and a hybrid motor vehicle, that is:

(A) New, not used, unless the motor vehicle is being converted;

(B) Titled and registered in the state; and

(C) Required to be licensed or subject to licensing for operation upon the highways of the state.

(r.3) "Purchaser" means the buyer or the lessee of a category 1 or category 1 A vehicle, but does not include the state or any political subdivision of the state. For tax years commencing on or after January 1, 2017, a lessee seeking to claim a credit allowed in this section must enter into a lease with a term of not less than two years.

(s) "Traditional fuel" means a petroleum-based motor fuel commonly used on the highways of the state in the year 2008.

(2) (a) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2022, there is allowed to any person a credit against the tax imposed by this article, not to exceed the amount specified in subsection (4) of this section, for the purchase or lease of a motor vehicle defined as category 1.

(a.3) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2017, there is allowed to any person a credit against the tax imposed by this article, not to exceed six thousand dollars, for the purchase, lease, or conversion of a motor vehicle defined as category 2 or category 3.

(a.5) (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2015, there is allowed to any person a credit against the tax imposed by this article, not to exceed six thousand dollars, for the purchase, lease, or conversion of a motor vehicle defined as category 4 or category 4 A.

(II) This paragraph (a.5) is repealed, effective December 31, 2019.

(b) (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2014, there shall be allowed to any person a credit against the tax imposed by this article, not to exceed seven thousand five hundred dollars, for the conversion of a motor vehicle defined as category 1 A.

(II) This paragraph (b) is repealed, effective December 31, 2018.

(c) With respect to the tax years commencing on or after January 1, 2014, but prior to January 1, 2022, there is allowed to any person a credit against the tax imposed by this article, not to exceed the amount specified in subsection (4) of this section, for the conversion of a motor vehicle defined as category 1 A.

(d) (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2015, there is allowed to any person a credit against the tax imposed by this article, not to exceed six thousand dollars, for category 5.

(II) This paragraph (d) is repealed, effective December 31, 2019.

(e) (I) A purchaser may assign the tax credit allowed in this section for the purchase or lease of a category 1 or category 1 A vehicle completed on or after January 1, 2017, to a financing entity as follows:

(A) The assignment to the financing entity must be completed at the time of purchase or lease by entering into an election statement as set forth in subparagraph (III) of this paragraph (e);

(B) The purchaser must title and register the vehicle in the state as required by state law;

(C) The purchaser must assign the tax credit to the financing entity and forfeit the right to claim the tax credit on the purchaser's tax return in exchange for good and valuable consideration; and

(D) The financing entity shall compensate the purchaser for the full nominal value of the tax credit; except that the financing entity may collect an administrative fee not to exceed one hundred fifty dollars for processing the assignment. The compensation paid to the purchaser is considered a refund of state taxes and is not income.

(II) Notwithstanding section 39-21-108 (3), if a purchaser assigns the tax credit to a financing entity pursuant to this paragraph (e), the financing entity receives the full amount of the tax credit that the purchaser is allowed in this section. Any unpaid balance or unpaid debt of the purchaser may not be credited from the amount of the tax credit allowed in this section.

(III) To complete the tax credit assignment, the purchaser and the financing entity must enter into an election statement that must:

(A) Identify the vehicle identification number of the category 1 or category 1 A vehicle for which a credit is allowed in this section; and

(B) Affirm that the requirements specified in subparagraph (I) of this paragraph (e) were met.

(IV) The financing entity may authorize an agent or a designee to sign the election statement on its behalf.

(V) The financing entity shall electronically submit a report containing the information contained in the election statement described in subparagraph (III) of this paragraph (e) to the department of revenue within thirty days of the purchase or lease of a category 1 or category 1 A vehicle in such a form and in such a manner as required by the department.

(VI) The financing entity shall also file the election statement described in subparagraph (III) of this paragraph (e) with the original tax return for the taxable year in which the category 1 or category 1 A vehicle is purchased or leased.

(VII) The department of revenue, in consultation with the Colorado energy office created in section 24-38.5-101, C.R.S., shall develop a model report and election statement no later than December 1, 2016.

(3) If a motor vehicle is leased, the lessee, not the lessor, is allowed to claim the credit allowed pursuant to this section. The lessee may elect to assign the tax credit allowed pursuant to this section for the lease of a category 1 or category 1 A vehicle to a financing entity as specified in paragraph (e) of subsection (2) of this section.

(4) The amount of the credit allowed pursuant to this section is calculated as follows:

(a) Category 1. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2017, 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, not to exceed six thousand dollars;

(II) With respect to the tax years commencing on or after January 1, 2017, but prior to January 1, 2020, five thousand dollars for a purchase or two thousand five hundred dollars for a lease;

(III) With respect to the tax years commencing on or after January 1, 2020, but prior to January 1, 2021, four thousand dollars for a purchase or two thousand dollars for a lease;

(IV) With respect to the tax years commencing on or after January 1, 2021, but prior to January 1, 2022, two thousand five hundred dollars for a purchase or one thousand five hundred dollars for a lease.

(b) Category 1 A. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2017, seventy-five percent of the actual cost incurred by the taxpayer during the tax year for the conversion of a motor vehicle defined as category 1 A, not to exceed six thousand dollars;

(II) With respect to the tax years commencing on or after January 1, 2017, but prior to January 1, 2020, five thousand dollars;

(III) With respect to the tax years commencing on or after January 1, 2020, but prior to January 1, 2021, four thousand dollars;

(IV) With respect to the tax years commencing on or after January 1, 2021, but prior to January 1, 2022, two thousand five hundred dollars.

(c) Category 2. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2014, twenty-five percent of the difference between the actual cost incurred by such taxpayer during the tax year in purchasing or leasing a category 2 motor vehicle and the cost of the same motor vehicle that uses a traditional fuel or, if the same vehicle is not available, then the cost of the most similar vehicle, taking into account the model, make, engine size, and options, that uses a traditional fuel;

(II) With respect to the tax years commencing on or after January 1, 2014, but prior to January 1, 2017, fifteen percent of the difference between the actual cost incurred by such taxpayer during the tax year in purchasing or leasing a category 2 motor vehicle and the cost of the same motor vehicle that uses a traditional fuel or, if the same vehicle is not available, then the cost of the most similar vehicle, taking into account the model, make, engine size, and options, that uses a traditional fuel.

(III) to (V) (Deleted by amendment, L. 2016.)

(VI) This paragraph (c) is repealed, effective December 31, 2021.

(d) Category 3. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2014, thirty-five percent of the actual cost incurred by a taxpayer during the tax year for the conversion of a motor vehicle defined as category 3;

(II) With respect to the tax years commencing on or after January 1, 2014, but prior to January 1, 2017, twenty-five percent of the actual cost incurred by a taxpayer during the tax year for the conversion of a motor vehicle defined as category 3.

(III) to (V) (Deleted by amendment, L. 2016.)

(VI) This paragraph (d) is repealed, effective December 31, 2021.

(e) (I) Category 4. (A) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2014, ten and one-half percent of the actual cost incurred by a taxpayer during the tax year in purchasing or leasing a category 4 motor vehicle;

(B) With respect to the tax years commencing on or after January 1, 2014, but prior to January 1, 2015, twelve and one-quarter percent of the actual cost incurred by a taxpayer during the tax year in purchasing or leasing a category 4 motor vehicle.

(II) This paragraph (e) is repealed, effective December 31, 2019.

(f) (I) Category 4 A. (A) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2014, thirty-five percent of the actual cost incurred by a taxpayer during the tax year for the conversion of a motor vehicle defined as category 4 A;

(B) With respect to the tax years commencing on or after January 1, 2014, but prior to January 1, 2015, twenty-five percent of the actual cost incurred by a taxpayer during the tax year for the conversion of a motor vehicle defined as category 4 A.

(II) This paragraph (f) is repealed, effective December 31, 2019.

(g) Category 5. (I) With respect to the tax years commencing on or after January 1, 2013, but prior to January 1, 2015, twenty-five percent of the actual cost incurred by a taxpayer during the tax year for category 5.

(II) This paragraph (g) is repealed, effective December 31, 2019.

(5) With respect to any model year 2004 and newer hybrid motor vehicle, notwithstanding the limitation set forth in subsection (6) of this section, a taxpayer that converts such a motor vehicle to a category 1 A motor vehicle shall be eligible for the category 1 A credit.

(6) Except as provided in subsection (5) of this section, and notwithstanding the allowance of credits for any tax years commencing on or after January 1, 2013, but prior to January 1, 2014, under this section and section 39-22-516.5, no more than one tax credit shall be granted pursuant to this section and sections 39-22-516, 39-22-516.5, and 39-22-516.8 for any individual motor vehicle.

(7) If a credit authorized in this section exceeds the income tax due on the income of the taxpayer for the taxable year, the excess credit may not be carried forward and shall be refunded to the taxpayer.

(8) With respect to tax years commencing on or after January 1, 2017, the taxpayer claiming a credit allowed in this section shall provide the department of revenue with, and the department shall commence tracking, the vehicle identification number of the motor vehicle for which a credit is claimed as allowed in this section.

(9) Making the purchaser aware of the income tax credit allowed in this section or helping the purchaser assign the income tax credit to a financing entity as allowed in this section does not rise to the level of providing the purchaser with unauthorized tax advice.

(10) This section is repealed, effective December 31, 2026.

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