Colorado allows refundable income tax credits for the purchase or lease of qualifying motor vehicles and trucks. In general, the credit is allowed for new electric and plug-in hybrid electric motor vehicles and trucks that are titled and registered in Colorado, although several additional requirements apply. For complete information about these credits, please see Department publications Income Tax Topics: Innovative Motor Vehicle Credit and Income Tax Topics: Innovative Truck Credit, both of which are available on the Current Guidance Publications webpage.

House Bill 23-1272 made significant changes to these credits. A brief explanation of these changes is provided below. Some of the changes took effect July 1, 2023, and will affect qualifying motor vehicles purchased after that date, while other changes will not apply until 2024 or 2025. Some of the changes, apply only to the innovative motor vehicle credit (allowed for qualifying vehicles with a gross vehicle weight rating (“GVWR”) of 8,500 pounds or less), while other changes apply only to the innovative truck credit (for qualifying vehicles with GVWR of more than 8,500 pounds). Many of the changes apply to both the innovative motor vehicle credit and the innovative truck credit.