House Bill 23-1272 introduced significant updates to the Decarbonization tax credits. These updates impact both the Innovative Motor Vehicle (IMV) credit (for vehicles 8,500 pounds or less) and the Innovative Truck Credit (for vehicles over 8,500 pounds). This bill included a temporary specific ownership tax rate reduction on a portion of the sale of electric medium- and heavy-duty trucks registered in a in a fleet.
There was a State programming error when implementing the legislation that incorrectly applied the specific ownership tax rate reduction to ineligible vehicles, leading to a miscalculation in the taxable value of some vehicles during their registration.
Below are FAQs for impacted customers:
Frequently Asked Questions
- Why does Colorado give a tax break for clean vehicles?
The Decarbonization tax credits and rate reductions incentivize the adoption of cleaner vehicles by reducing the taxable value of qualifying motor vehicles, ultimately lowering emissions and promoting sustainable transportation.
- What vehicles get the tax rate reduction at registration?
To get the specific ownership tax rate reduction, a vehicle must meet the following requirements:
- Be classified as Class A or B
- Weigh over 8,500 pounds.
- Be a new vehicle purchase.
- Run on electricity or be a plug-in hybrid.
- Be used as part of a fleet of vehicles.
- What mistake happened with the tax rate reduction?
The state made a system programming error. This error gave the tax rate reduction to some vehicles that were not qualified to receive it (i.e. trucks that were not part of fleets).
- Was the error fixed?
Yes, this error was fixed by the State in October 2024.
- How does this mistake affect vehicle owners?
Impacted vehicles registered between January 1, 2024 and October 3, 2024 may see higher registration costs at their next registration. This is because they received a specific ownership tax rate reduction they did not actually qualify for. The vehicle records have now been corrected so that future registrations calculate appropriately.
- Will I owe more money if my vehicle was affected?
If your vehicle received this tax rate reduction but is not qualified, you may have an amount due for your vehicle. You will receive a letter from your county motor vehicle office or the state explaining what to do. Any amount owed can be paid at your local county motor vehicle office.
- When did these new rules start?
Some changes started in 2023, and others in 2024. More changes will occur this year, 2025. The error was isolated to the specific ownership tax rate reduction. Since the error was corrected in October 2024, there will not be additional impacted customers. For more detailed information on when credits and rate reductions began or will begin, visit this Innovative Motor Vehicle and Innovative Truck Credit webpage link.
- How can I learn more about my vehicle taxes?
For information about Specific Ownership Tax and its calculation, please visit the DMV’s Taxes and Fees webpage and scroll down to the Specific Ownership Taxes section. You may also call the state DMV at 303-205-5608. You may contact or visit your local county motor vehicle office. For your vehicle's specific details, please contact your local county motor vehicle office.