SB 23-016 allows a qualified retailer to claim an income tax credit equal to 33% of the aggregate purchase price of each retail sale of new, electric-powered lawn equipment a qualified retailer sells in Colorado during the retailer’s income tax year. The credit is allowed for income tax years beginning on or after January 1, 2024, but before January 1, 2027.
To be eligible to claim this credit, the criteria that must be met includes but is not limited to:
1. A retailer must be a “qualified retailer” by satisfying the following criteria:
- They must sell new, electric-powered lawn equipment;
- They must hold a current Colorado sales tax license;
- They must timely file monthly Colorado sales tax returns showing a tax liability for at least 12 months;
- They must have timely paid the taxes due on the monthly Colorado sales tax return; and
- They must register with the Department via the retailer’s Revenue Online account.
2. A retailer must register with the Department. The person or entity that will file the income tax return for the qualified retailer must be the one to register with the Department. 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-powered lawn equipment credit and the electric bicycle credit by selecting the corresponding box or boxes for which you wish to register.
- After you submit the registration form, you will receive a confirmation code.
- Once the registration is processed, you will receive an approval or denial letter from the Department.
3. A qualified retailer must make retail sales in Colorado of new, electric-powered lawn equipment, which means a:
- Lawn mower;
- Leaf Blower;
- Trimmer; or
- Snow Blower.
4. A qualified retailer must provide the purchaser at the time of the retail sale of new, electric-powered lawn equipment a discount equal to 30% of the aggregate purchase price, and show the discount as a separate line item on the invoice or receipt provided to the purchaser.
5. A qualified retailer must submit quarterly reports in Revenue Online and file a Colorado income tax return. See “How do I claim the electric-powered lawn equipment credit” FAQ below for information on how to submit a quarterly report and what information you will need.
6. A qualified retailer cannot begin offering the discount and accounting for the credit until their income tax year begins on or after January 1, 2024.
Electric-Powered Lawn Equipment Tax Credit FAQ's
To claim the electric-powered lawn equipment credit, a qualified retailer must submit quarterly reports in Revenue Online and file a Colorado income tax return.
Quarterly Reports
A qualified retailer will be granted access to electronically submit quarterly reports through their Revenue Online account after receiving an approval letter from the Department that the retailer is a “qualified retailer.” A qualified retailer must submit quarterly reports by navigating to the “Additional Actions” section from the homepage and selecting “Submit Credit Records.” The quarterly reports require the qualified retailer to collect and input:
- The number of new, electric-powered lawn equipment sold per eligible category (lawn mower, leaf blower, trimmer, or snow blower) for which the discount was provided during each month of the reporting period; and
- The gross sales of new, electric-powered lawn equipment sold per eligible category (lawn mower, leaf blower, trimmer, or snow blower) for which the discount was provided during each month of the reporting period. Gross sales mean the aggregate purchase price of the new electric-powered lawn equipment sold before the qualified retailer provides the discount required to claim the credit.
Here is the template for Electric Powered Lawn Equipment Credit Submission.
Income Tax Return
A qualified retailer must file a Colorado income tax return to claim credits for any new, electric-powered lawn equipment sold in Colorado during the qualified retailer’s income tax year. The qualified retailer must input the gross sales of new, electric-powered lawn equipment sold in Colorado during the qualified retailer's income tax year on their income tax return.
Sales tax must be calculated on the aggregate purchase price of the electric-powered lawn equipment sold before the qualified retailer provides the discount required to claim the credit.
However, if a qualified retailer offers a store coupon or discount in excess of the discount required to be provided to the purchaser to qualify for the credit, such coupon or additional discount does reduce the purchase price on which sales tax is calculated because there is no reimbursement to the retailer for the reduction. As such, sales tax must be calculated on the couponed or discounted purchase price of the item in excess of the discount required to qualify for the credit. These types of discounts will also reduce the purchase price on which the credit is calculated.
There are no minimum or maximum pricing limitations on the electric-powered lawn equipment that may be sold and eligible for the credit
Although 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, electric-powered lawn equipment is sold and thereby reduces the amount of the required estimated payments.