This publication covers the innovative motor vehicle credit and innovative truck credit available for tax years beginning on or after January 1, 2017, but prior to January 1, 2022. Both tax credits were available in prior tax years, but were subject to different rules for those years. Please see FYI Income 67 and FYI Income 68 for information regarding the innovative motor vehicle credit and innovative truck credit, respectively, for tax years prior to 2017.
Colorado titling and registration is a requirement for both the innovative motor vehicle and innovative truck credits. The credits are generally available for the purchase, lease, or conversion of motor vehicles and trucks that are electric (EV), are plug-in hybrid electric (PHEV), or run on compressed natural gas (CNG), liquefied natural gas (LNG), liquefied petroleum gas (LPG), or hydrogen. The innovative truck credit is also available for idling reduction and aerodynamic technologies, clean fuel refrigerated trailers, and hydraulic hybrid conversions.
WHO CAN CLAIM THE CREDIT The credit can be claimed by any taxpayer that purchases or leases a qualifying vehicle or qualifying trailer, converts a vehicle or trailer they own into a qualifying vehicle or qualifying trailer, or modifies a vehicle they own by installing idling reduction or aerodynamic technologies. In the case of a lease of a qualifying vehicle, the credit is allowed to the lessee and not to the lessor. State or local governments cannot claim the credit.
QUALIFYING VEHICLES, TRAILERS, CONVERSIONS, AND DEVICES There are both general and specific requirements for a vehicle, trailer, conversion, or modification to qualify for the credit. Credits may be claimed only with respect to vehicles or trailers that meet the following criteria.
• For purchases or leases, the vehicle must be new and not previously titled or registered in any jurisdiction.
• In the case of conversion, the conversion must be EPA certified.
• The vehicle or trailer must be titled and registered in Colorado or base plated in Colorado if registered via IRP.
• The vehicle must have a maximum speed of at least 55 miles per hour.
• The vehicle, trailer, conversion, or device must qualify under one of the categories listed in the table below.