Starting April 1, residents of Colorado can purchase an e-bike from a participating retailer and receive an instant $450 tax credit toward that purchase. This is a first-of-its-kind program in the nation. This tax credit comes off the heels of Denver’s e-bike rebate program and will extend to 2032.
The Colorado Energy Office and the Colorado Department of Revenue are behind the launch of the nation’s first statewide electric bicycle (e-bike) tax credit. The tax credit will be automatic in the point-of-sale purchase of an eligible e-bike. Participating retailers will also receive $50 per qualifying e-bike purchase as an incentive for offering the discount.
The e-bike tax credit was created by HB23-1272 “Tax Policy that Advances Decarbonization.” The measure was sponsored by senators Lisa Cutter and Steve Fenberg and representatives Mike Weissman and Junie Joseph; Gov. Jared Polis signed the bill following the 2023 legislative session.
“Reducing the cost of e-bikes by $450 will save Coloradans money and help reduce traffic for everyone. I’m excited that so many Coloradans will save money not only when buying an e-bike, but also on reduced gas costs for their car because sometimes they will be able to get where they want to go on their brand new e-bike,” said Polis.
“Transportation is the leading source of greenhouse gas pollution in Colorado, making low-emissions alternatives to cars particularly important to achieve our pollution reduction goals,” said Colorado Energy Office Executive Director Will Toor. “E-bikes are a very popular zero-emission transportation option in Colorado, and we’re excited to launch this tax credit to get even more Coloradans out of their cars and onto e-bikes.”
The e-bike tax credit discount follows the successful implementation and completion of the statewide, income-qualified e-bike rebate program, which has resulted in 5,557 new e-bike purchases between August 2023 and February 2024.
Coloradans will automatically receive the discount when they purchase a qualified e-bike at a participating retailer. Residents are limited to one e-bike tax credit discount per year. Residents who have an unredeemed, active state e-bike rebate may combine the e-bike rebate with the e-bike tax credit discount, as long as the retailer is registered as a participating retailer for both programs.
Retailers interested in offering the e-bike tax credit discount must register with the Colorado Department of Revenue in order to participate. For tax year 2024, retailers will receive the tax credit as reimbursement for providing the discount when they file their 2024 taxes. The e-bike tax credit is fully refundable.
The Department of Revenue is developing a process that will allow quarterly reimbursements for providing the discount starting in tax year 2025. Additionally, lenders such as the Colorado Enterprise Fund (CEF) and ANB Bank offer flexible financing to support retailers who may need financial assistance to participate during the first year of the program. Retailers interested in financing opportunities should reach out to sarah.thorne@state.co.us to get connected to CEF and ANB.
The state of Colorado tax credit discount will be available through 2032. Note that the public list of participating retailers is self-reported and may not be comprehensive. Colorado Energy Office recommends that residents call their local e-bike retailer to confirm it is offering the discount. The list of participating retailers will expand as more retailers register and report their participation. Visit Colorado Energy Office’s e-bike tax credit webpage for more information.