For income tax years beginning on or after January 1, 2024, but before January 1, 2033, Colorado allows an income tax credit to incentivize the purchase of electric bicycles. The credit is allowed to qualified retailers for all retail sales of new, qualified electric bicycles sold in Colorado during the retailer’s income tax year to a qualified purchaser. The qualified retailer may claim an income tax credit for each retail sale of a new qualified electric bicycle sold to a Colorado resident. For the income tax year commencing on January 1, 2024, the credit is allowed only for retail sales made on or after April 1, 2024, but on or before December 31, 2024.
A retailer must register with the Department. If the retailer is an affiliated corporation included in a combined or consolidated return, the registration must be made under the account for the parent corporation. If the retailer is a partnership or S corporation, the registration must be made under the account for the partnership of S corporation. To register:
- Go to Revenue Online and log in to the account that will file the income tax return for the qualified retailer.
- From the “Accounts” tab on the homepage, scroll down to your Income tax account type (e.g., COR, PAR, or IND).
- From the Income tax account type box, select the “Additional Actions” link and click on the “Submit Electric Powered Lawn Equipment and Electric Bicycle Registration” under the “Submit Credit Registration” box.
- You may register for either or both the electric bicycle credit and the electric lawn equipment credit by selecting the corresponding box or boxes for which you wish to register.
- After you submit the registration form, registrants will receive a confirmation code to keep for their records.
- Once the registration is processed, you will receive an approval or denial letter from the Department.
A qualified retailer must, at the time of the retail sale, collect from each qualified purchaser either a completed DR 0514 or complete the required fields on the spreadsheet.
The answer depends on how each store or shop files their income tax returns. The person or entity that files the income tax return for the qualified retailer must be the entity to register with the Department. If, for example, a store or shop is a subsidiary and the parent entity files the income tax return of the store or shop, then only the parent entity may apply as the qualified retailer and in the registration, application must list the corresponding CANs (Colorado account numbers) for each store that will sell new qualified electric bicycles for which the parent intends or could claim this credit. However, if each store files its own income tax return, the store or shop must register as a qualified retailer.
No, there is no minimum or maximum retail price of electric bicycles that qualify for the credit. However, the electric bicycle must be an eligible electric bicycle as set forth on the Colorado Energy Office’s website in order to qualify for the credit.
As long as the receipt clearly differentiates or indicates the amount of the discount, the naming convention you choose can be somewhat flexible.
This credit cannot be applied to any sales tax liability. The credit is an income tax credit so it can be applied to only an income tax liability. For tax year 2024, qualified retailers are unable to claim the credits until they file their Colorado income tax return in 2025. The credits will first be applied to any income tax liability of the qualified retailer and the remainder will be refunded.
Although the credits may not be claimed before a qualified retailer files their Colorado income tax return, a qualified retailer may take any allowable credits into account in calculating their required estimated payments for their tax year. Any allowable credits reduce the qualified retailer’s tax liability for the tax year in which the new qualified electric bicycles are sold and thereby reduce the amount of the required estimated payments.
Additionally, starting in 2025, qualified retailers may elect to receive advance payments of the income tax credits. Additional information on this process will be posted on the Colorado Department of Revenue’s website in early 2025.
A requirement to obtain the credit is that a qualified retailer must collect from a purchaser an affidavit affirming that the purchaser is a Colorado resident who has not previously purchased a new qualified electric bicycle that was discounted by a qualified retailer in the same calendar year. At the time of the purchase or before, a qualified retailer must review the documentation the purchaser provides in accordance with the instructions on the DR 0514 and ensure that the appropriate box on the form is checked or listed on the excel spreadsheet that corresponds with the document they reviewed.
Specifically, if a purchaser completes the Colorado driver license or Colorado identification card box on the form, the retailer must verify that the Colorado driver license or Colorado identification card is not expired.
Alternatively, if a purchaser is unable to provide a current, unexpired Colorado driver license or Colorado identification card, the purchaser must provide the retailer with one of the alternative proof of residency documents listed on either the DR 0514, Qualified Purchaser of an Electric Bicycle Affidavit, or the DR 0514 excel spreadsheet. The retailer must review the alternative proof of residency document to verify that it is dated within 3 months from the date of the purchase of the new qualified electric bicycle. If the document is older than 3 months from the date of the purchase of the new qualified electric bicycle, the retailer cannot provide the discount to the purchaser or claim the income tax credit for the retail sale. The retailer shall return the document to the purchaser after reviewing it. The retailer does not need to retain a copy of the document for their records.
Retailers should not keep a copy of the documentation they reviewed to verify a purchaser is a Colorado resident for their records.
To claim the electric bicycle credit, a retailer must submit quarterly reports in Revenue Online and file a Colorado income tax return.
Quarterly Reports
After the Department approves the registration of a retailer as a qualified retailer, the A qualified retailer will be granted access to electronically submit quarterly reports through their Revenue Online account. If the qualified retailer is an affiliated corporation included in a combined or consolidated return, the parent corporation must file the quarterly reports through their own Revenue Online account. To submit quarterly reports, log in to the qualified retailer’s Revenue Online account. From the “Account” tab on the homepage, scroll down to your income tax account type (e.g., COR, PAR, or IND). From the income tax account type box, select to the “Additional Actions” link and under the “Submit Credit Records” box, select "Submit Electric Bicycle Tax Credit Records." The quarterly reports require the qualified retailer to collect and input:
- The number of new qualified electric bicycles sold in Colorado during the reporting period for which the required discount was provided; and Submit all affidavits collected from qualified purchasers during the reporting period.
- The quarterly report contains a row for each month of the reporting period and a row to account for returned goods. The qualified retailer must report the required information for each month of the reporting period on the corresponding row. For example, if the electronic report is filed for the first quarter of the qualified retailer’s calendar tax year, January is month 1, February is month 2, and March is month 3.
The due date for quarterly reports coincides with the qualified retailer’s due dates for estimated tax payments. As a result, not every quarterly report will include three months of sales. For example, the first quarterly report for a calendar year filer will generally include qualifying sales made in January, February, and March, but the quarterly report filed for the second quarter will generally include qualifying sales from only April and May. Sales from Month 12, December for most filers, are reported separately on a final report.
If the qualified retailer fails to include any qualifying sale in the appropriate quarterly report, the qualified retailer may include that sale in the report they file for a subsequent credit report in the same tax year when the sale was made. If the quarterly and final reports filed by the retailer do not accurately reflect the correct number of qualifying sales made during the income tax year, the retailer must send a web message through their Revenue Online account to request any necessary correction to their credit reports.
Advance Payment
For credit reporting periods that are eligible for advance payment refunds there will be a step in the credit record submission process asking if you would like to elect to receive advance payment for all or a portion of the credits included in the quarterly report.
If you do not request advance payment during this submission process, you will not be able to request advance payment for the credits submitted at a future date. Any credits allowed, but not paid in advance, will be applied to your income tax liability, and any excess credit will be refunded when you file your Colorado income tax return.
If you indicate you would like to request advance payment, you will be asked whether you would like the full amount of the credits reported refunded. You may request advance payment of less than the full amount by choosing the option to specify a different amount, which you will then be prompted to enter. Indicate whether you would prefer to receive a paper check or direct deposit. If you select a paper check, the check will be sent to the address on file. If you select direct deposit, you will be prompted to enter your bank account information.
Selecting No will not prevent you from requesting advance payment for future periods.
Advance payment is not allowed for assignments made during the last month of the tax year. Credits assigned during the last month of the tax year will be claimed on your Colorado income tax return.
Please allow at least 14 days for the request to be processed and for the refund check or direct deposit to be issued. If you have not received your refund in that timeframe, please submit a secure web message through Revenue Online to request a refund status update.