For all you E-85 guys, check your state reg for AFV Income Tax Credit. CO is $6,000.

[J. Fast]

While conducting some tax research I found this and thought I'd share with you guys.

Here's the rules: >>>> Alternative Fuel Vehicle Income Tax Credit <<<<

Alternative Fuel Vehicle Income Tax Credit
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Colorado income tax credits are available for the purchase of an alternative fuel vehicle, for a motor vehicle that is converted to use alternative fuel, or for the replacement of the power source with a power source that uses alternative fuel. To qualify, the vehicle must be titled and registered in Colorado. (C.R.S. 39-22-516)

Definition of Alternative Fuel
Alternative fuel means compressed natural gas, propane, methanol and ethanol, or any mixture thereof containing 85% or more of methanol or ethanol by volume with gasoline or other fuels, electricity, or any other fuels, which may include, but are not limited to, clean diesel and reformulated gasoline so long as these other fuels make comparable reductions in carbon monoxide emissions and brown cloud pollutants as determined by the air quality control commission.

Computations of Credit
The credit is only available in the year during which the vehicle was purchased or converted. The credit is a percentage of:

the difference between the cost of the vehicle and the cost of the same or most similar vehicle that uses a traditional fuel, or
the cost incurred in converting the vehicle to an alternative fuel, or
the difference between the cost of replacing the power source and the cost of the same or most similar power source that uses a traditional fuel.

Limitations to the Credit
A vehicle can qualify for this credit only one time. To claim the credit on the purchase of a used vehicle a taxpayer must:

Provide a history of the vehicle indicating the prior owners and why they did not claim this credit.
Provide the cost difference used in computing the credit and the basis on which it is computed.
The cost difference will usually decrease ratably with the decrease in the value of the vehicle. For example, if the price paid for the used vehicle is 40% of the original MSRP, then the credit allowed will be 40% of the credit available for that vehicle when new.

If a ten-year old vehicle had a new alternative fuel engine put in one year ago, then the vehicle must be compared to the most similar vehicle valued with a one-year old gas engine, not a ten-year old engine.

To the extent the allowable credit exceeds the tax liability, the excess may be carried forward for up to five years.

Some More:

According to the Department of Energy in 2011 alternative fuel vehicle's or AFV's became eligible for a $6000 Income Tax Credit.

Here's the outline:

Colorado AFV Incentives and Laws for Vehicle Owner/Driver's
The list below contains summaries of all Colorado incentives and laws related to Vehicle Owner/Driver.

State Incentives
Alternative Fuel, Advanced Vehicle, and Idle Reduction Equipment Tax Credit


An income tax credit is available from the Colorado Department of Revenue for a motor vehicle titled and registered in Colorado that uses or is converted to use an alternative fuel, is a hybrid electric vehicle (HEV), or has its power source replaced with one that uses an alternative fuel.

Alternative Fuel Definition:

Alternative fuel is defined as compressed natural gas, propane, ethanol, or any mixture containing 85% or more ethanol (E85) with gasoline or other fuels, electricity, or any other fuels, which may include, but are not limited to, clean diesel and reformulated gasoline, so long as the Colorado Air Quality Control Commission determines that these other fuels result in comparable reductions in carbon monoxide emissions and brown cloud pollutants. Alternative fuel does not include any fuel product that contains or is treated with methyl tertiary butyl ether (MTBE). (Reference Colorado Revised Statutes 25-7-106.8 )


Laws and Regulations
Alternative Fuel Vehicle (AFV) Registration

Upon registering a motor vehicle with the Colorado Department of Revenue Division of Motor Vehicles, the vehicle owner must report the types of alternative fuel used to operate the vehicle and whether the vehicle is dedicated to one alternative fuel or uses more than one fuel. The Department of Revenue provides forms for the purpose of registering motor vehicles and must include space for the following fuel types: gasoline, diesel, propane, electricity, natural gas, methanol/M85, ethanol/E85, biodiesel, and other. (Reference Colorado Revised Statutes 42-3-113 )

Links:

http://www.afdc.energy.gov/afdc/prog...aws.php/CO/ETH
Alternative Fuels and Advanced Vehicles Data Center: Colorado Incentives and Laws for Vehicle Owner/Driver


From what I've gathered, once you register your vehicle as 100% alternative fuel converted you're eligible for the one time $6000 Income Tax Credit. I'm going to Register my VR-4 as an AFV converted vehicle in 2012 and take the deduction in 2012.

Second important point, with the ethanol conversion I'm also eligible for the Curb Idle Reduction Credit which means I can use an aftermarket ECU (such as an AEM) for the ECU if my curb Idle emissions are lower than the Fed Tier I and II emission limits. As long as the limits are below the Clean Air Regulation the vehicle is also exempt from OBDII reading.

The tax credit is for the cost to convert. A new Engine, Engine Management, Injectors, Fuel Delivery Setup, Emission testing, Tuning, and ALL Parts and Labor... any expense incurred for converting.

So how bout them apples guys... That's awesome.

That's pretty cool that I can run an AEM at the Colorado Emission Testing Center on E-85, now and I can deduct my upgrade .


I would suspect similar states have the same rules. Do some digging in the other 50 states! Just trying to get the word out!


Cheers Guy's

Jeremy