Colorado- Changes to the state tax credit

[BigSkies]

It looks like Governor Polis recently signed a law that changes the state tax credit. It looks like it will be good for many early pre-order holders, but bad for anyone paying more than $80k.

The credit has increased to $5,000, but now only applies to vehicles with an MSRP below $80,000. The new credit takes effect July 1st.

Does anyone have more details on this? I've found almost zero reporting on it outside of the linked article, and that doesn't give a lot of information. It might be enough to get me to switch to R1T/LA Silver so I can get a large pack below the $80k threshold.

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[sub]

Could Rivian reduce the MSRP by $20,000, and then add a $20,000 dealer markup? If other auto brands are allowed to add absurd dealer markups and not have it count against the tax credit price cap, why can't Rivian play that game too? Then all configs come in under $80,000 MSRP.

 

[CUBldr97]

says 1 July 2023, so im guessing its not for the entire tax year, so if took delivery prior to that then we are under the old rules? it is so weird they make things for partial year...

 

[Swilly]

says 1 July 2023, so im guessing its not for the entire tax year, so if took delivery prior to that then we are under the old rules? it is so weird they make things for partial year...

I believe that this will talk me out of picking a R1S from the shop right now. I am set for delivery of my build in July or August and I think the wait is worth my exact build and $2500 extra in CO tax credits.

 

[Swilly]

Could Rivian reduce the MSRP by $20,000, and then add a $20,000 dealer markup? If other auto brands are allowed to add absurd MSRP and not have it count against the tax credit price cap, why can't Rivian play that game too? Then all configs come in under $80,000 MSRP.

FWIW, my guide just told me that underbody reinforcement and spare tire are considered accessories and not msrp on sale sheet. Can anyone confirm this that already has their Rivian? I am getting clarification on how they categorize int/ext color and wheels. This may help keep a lot or all of the builds under the cap, but it’s from a guide, so take it with a shaker of salt.

 

[SANZC02]

FWIW, my guide just told me that underbody reinforcement and spare tire are considered accessories and not msrp on sale sheet. Can anyone confirm this that already has their Rivian? I am getting clarification on how they categorize int/ext color and wheels. This may help keep a lot or all of the builds under the cap, but it’s from a guide, so take it with a shaker of salt.

He is incorrect, the MSRP is the subtotal above the destination charge. If it has the underbody protection on it it is included. It would have been much clearer if these tax breaks just went off of base price.

What Does MSRP Include?
The MSRP of a new vehicle doesn't really tell you much beyond what the car, truck, or SUV's builder thinks the dealership should charge, and what you should pay. It includes the base price of the vehicle, plus the cost of any options and option packages. Sometimes it will reflect option package discounts, which are price reductions if you buy options as a group, rather than a la carte.
A car's base price is its price without options. Sometimes you'll see it listed as the price of the lowest trim level available, while in other cases you'll see a base price for each trim level before any additional options are added.
You’ll find the MSRP displayed on the vehicle’s window sticker. Called the “Monroney” sticker, after a U.S. Senator who sponsored consumer legislation mandating its use on new cars by automakers and dealerships, the window sticker tells you about more than just the vehicle price. You can find out more in our story on things you can learn from a car’s Monroney Sticker.
What Doesn’t MSRP Include?
A car's sticker price does not include many other costs you'll have to pay if you want the car. First, the sticker price doesn't include the vehicle's destination charge. That's a cost an automaker charges the dealer to ship the car from the factory to the new car lot. While many elements of a car-buying transaction are negotiable, the freight charge typically isn’t.
Any factory-installed equipment will be included in the sticker price, but any dealer-installed options will not be shown on the Monroney sticker as part of the MSRP.
The MSRP also does not include taxes, fees, and registration costs. They differ by the state you live in, and you should include them in your math when you’re figuring the total take-home price of the vehicle. Like the destination charge, shoppers can’t haggle over these mandated fees.
Many dealerships charge other fees, such as fees for preparing the sales documents (often called doc, or documentation fees), advertising fees, and dealer prep. Those dealer fees are also not part of the MSRP, but most can be negotiated. Add-ons you’ll be offered during the buying process, such as extended warranty, VIN etching, paint protection, and others are not included in the MSRP.

 

[Swilly]

He is incorrect, the MSRP is the subtotal above the destination charge. If it has the underbody protection on it it is included. It would have been much clearer if these tax breaks just went off of base price.

What Does MSRP Include?
The MSRP of a new vehicle doesn't really tell you much beyond what the car, truck, or SUV's builder thinks the dealership should charge, and what you should pay. It includes the base price of the vehicle, plus the cost of any options and option packages. Sometimes it will reflect option package discounts, which are price reductions if you buy options as a group, rather than a la carte.
A car's base price is its price without options. Sometimes you'll see it listed as the price of the lowest trim level available, while in other cases you'll see a base price for each trim level before any additional options are added.
You’ll find the MSRP displayed on the vehicle’s window sticker. Called the “Monroney” sticker, after a U.S. Senator who sponsored consumer legislation mandating its use on new cars by automakers and dealerships, the window sticker tells you about more than just the vehicle price. You can find out more in our story on things you can learn from a car’s Monroney Sticker.
What Doesn’t MSRP Include?
A car's sticker price does not include many other costs you'll have to pay if you want the car. First, the sticker price doesn't include the vehicle's destination charge. That's a cost an automaker charges the dealer to ship the car from the factory to the new car lot. While many elements of a car-buying transaction are negotiable, the freight charge typically isn’t.
Any factory-installed equipment will be included in the sticker price, but any dealer-installed options will not be shown on the Monroney sticker as part of the MSRP.
The MSRP also does not include taxes, fees, and registration costs. They differ by the state you live in, and you should include them in your math when you’re figuring the total take-home price of the vehicle. Like the destination charge, shoppers can’t haggle over these mandated fees.
Many dealerships charge other fees, such as fees for preparing the sales documents (often called doc, or documentation fees), advertising fees, and dealer prep. Those dealer fees are also not part of the MSRP, but most can be negotiated. Add-ons you’ll be offered during the buying process, such as extended warranty, VIN etching, paint protection, and others are not included in the MSRP.

I was having the conversation with him as I wrote my previous response. By the end of the conversation we were back to everything is included in msrp. You are right, making the cutoff on base instead of msrp would alleviate a lot of this.

 

[BrentInCO]

It looks like Governor Polis recently signed a law that changes the state tax credit. It looks like it will be good for many early pre-order holders, but bad for anyone paying more than $80k.

The credit has increased to $5,000, but now only applies to vehicles with an MSRP below $80,000. The new credit takes effect July 1st.

Does anyone have more details on this? I've found almost zero reporting on it outside of the linked article, and that doesn't give a lot of information. It might be enough to get me to switch to R1T/LA Silver so I can get a large pack below the $80k threshold.

I reached out and received the below reply directly from the horse’s mouth.

 

[BigSkies]

I reached out and received the below reply directly from the horses mouth.

Thanks for the research!

I have the post-price hike pricing, so I'm trying to get access to the shop now and hopefully get something before the $80k MSRP cap takes effect.

I guess those with pre-price hike pricing would want to push out the delivery until after July 1st.

What weird incentives we all have.

 

[jdk24]

Couple more questions on this bill that might be obvious. Does anyone know:

1) Which category (passenger vehicle over 8500 lbs/light or medium duty truck) R1S's fall into in this bill?

2) If I purchase an R1S on 7/1 or later under $80k MSRP, I'd be looking at the 4th column in this chart right?

 

[Swilly]

Couple more questions on this bill that might be obvious. Does anyone know:

1) Which category (passenger vehicle over 8500 lbs/light or medium duty truck) R1S's fall into in this bill?

2) If I purchase an R1S on 7/1 or later under $80k MSRP, I'd be looking at the 4th column in this chart right?

This chart won’t be applicable come 7/1/23. Beginning 7/1 the light duty passenger and truck categories are combined and offer a $5K credit. Medium and heavy duty trucks are combined and will be eligible for a $12K credit. I think it’s a $55K cap for cars and $80k for trucks and SUVs. Assuming you kept your build under $80K, and take delivery on or after July 1, you should be eligible for the $5K credit.

 

[Sgt Beavis]

This new credit is making a damn good argument that my next truck should be an R1T Dual Motor. The only problem, for me, is that I would have to skip the off road package to fit it under the $80K cutoff.

 

[Spaceball1]

This chart won’t be applicable come 7/1/23. Beginning 7/1 the light duty passenger and truck categories are combined and offer a $5K credit. Medium and heavy duty trucks are combined and will be eligible for a $12K credit. I think it’s a $55K cap for cars and $80k for trucks and SUVs. Assuming you kept your build under $80K, and take delivery on or after July 1, you should be eligible for the $5K credit.

Not quite.

The law for vehicles over 8500 GVWR won’t change until 1/1/24. Which is good for those above the $80k price cap if they get delivery this year and $2800 tax credit. If you’re below $80k, you’ll want to wait until 2024 to get max credit ($5k).

Also, the $55k cap for cars and $80k cap for trucks and SUVs is for the Federal credit, not the state one. Colorados new credit is a flat $80k for any vehicle.

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