US: Colorado grants $5,000 tax credit for electric cars image

The US state of Colorado is trying to boost the demand for electric cars by putting in place a new generous incentive for buyers.

Purchase rebates and tax credits have always been a major factor in boosting the demand for electric cars, as their prices have been the main turn-off point. Colorado took a big step in this direction in May, as the legislature approved bill HB 1332 that dramatically improves the state’s alternative fuel vehicle tax credits by simplifying the formula and setting a flat 5,000-dollar credit for buying an EV. The old system required the taxpayer to calculate the income tax credit using formulas based on a specified percentage of the actual cost incurred or battery size. Most importantly, the Southwest Energy Efficiency Project said the new approach made credits assignable to a car dealer or finance company, which would effectively turn them into a point of sale incentive, meaning that the tax credit transformed into a rebate and was available when a customer went on to buy an electric vehicle.

The new incentive goes hand in hand with the 7,500-dollar federal tax credit, thus saving you 12,500 dollars if you decide to go green. Such an impulse “makes the Colorado incentive the best in the nation, combining one of the highest tax credits with a point of sale option, and is expected to significantly increase EV sales,” according to SWEEP, the organization promoting energy efficiency policy and programs throughout six states: Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming.

Via Autoblog