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Cash money, two ways: Colorado enacts $5,000 EV tax incentive

In an interesting twist, you can either have your cash now, in the form of an incentive, or later, in the form of a tax break.

2016 Nissan Leaf SL

For those who don't know, that "incentive" often touted alongside electric vehicle pricing isn't some sort of instant rebate. It's a tax credit, effectively saving you that much in taxes the next time you file. But, in Colorado, which recently approved a state-level incentive, you can have it another way, choosing either an instant rebate or a tax credit.

Colorado recently passed HB 1332 (PDF), which grants a $5,000 tax incentive to buyers of "alternative fuel" motor vehicles, as they're described in the bill. Combined with a $7,500 federal tax credit, buyers can see $12,500 in net tax incentives after purchasing an EV in Colorado.

But what if you don't want to wait until your next trip to your CPA? Colorado has made its system unique in that, instead of taking the $5,000 tax credit, you can "assign" the tax credit to the dealership from which you're buying the car, and that dealer will take $5,000 (minus up to $150 for administrative fees) off the car's purchase price. So the credit can be either instant or not, depending on your preferences.

While EV fans will be happy to hear that this bill has passed, used-EV salesmen won't be anywhere near as overjoyed. The bill splits up incentives and used EV sales, so you're no longer eligible for a tax credit for purchasing a used electric car.

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