Colorado Alternative Fuel Tax Credit -- Vehicles that Qualify

By Sean Tucker

The state of Colorado wants you to drive a greener car.

In fact, the state wants Colorado residents to drive greener cars so badly, it's prepared to help with the purchase price. In some cases, Colorado's new Alternative Fuel Income Tax Credit will cut the purchase price of a new car by nearly a third.

The credit is available on many hybrid, electric, compressed natural gas and ethanol-powered cars. Even certain clean diesel-powered vehicles qualify. So-called "mild hybrids," which don't use an electric motor to power their wheels, but simply cut off their gasoline engines at every stoplight, don't make the cut.

It doesn't matter if you buy or lease the vehicle, and it's even possible to claim the credit on a used car, with one caveat: the credit can be used only once in a vehicle's life, so if the previous owner claimed it, you can't.

To calculate the credit, the state compared the cost of the green version of a car with its closest equivalent among conventional, gasoline-powered cars. The credit covers between 50 percent and 85 percent of that price difference, depending on how efficient the new vehicle is.  In most cases, that means at least a few thousand dollars off the cost of the car.  In a few cases, however, it leads to some amazing discounts -- like more than $20,000 off a Lexus LS 600h, or $42,000 off a Tesla Roadster.

The full list of qualifying new vehicles, and rebates, is below. Values for used vehicles can be found in a fact sheet put of by the Taxpayer Service Division of the Colorado Department of Revenue.

Qualifying Vehicles and Rebates:

2009 Ford Escape Hybrid
Tax credit available $3,906

2009 Honda Civic GX (Natural Gas):
Tax credit available $ 6,035

2009 Honda Civic Hybrid
Tax credit available $ 2,640

2010 Honda Insight
Tax credit available $ 2,958

2009 Lexus GS 450h
Tax credit available $ 6,481

2009 Lexus LS 600h L
Tax credit available $ 20,392

2009 Mercury Mariner Hybrid
Tax credit available $3,953

2009 Toyota Camry Hybrid
Tax credit available $2,043

2009 Toyota Highlander Hybrid
Tax credit available $4,688

2009 Toyota Prius
Tax credit available $ 3,110

2009 Cadillac Escalade Hybrid
Tax credit available $ 5,465

2009 Chevy Malibu Hybrid
Tax credit available $ 1,573

2009 Chevy Silverado Hybrid
Tax credit available $ 2,748

2009 Chevy Tahoe Hybrid
Tax credit available $ 3,208

2009 GMC Sierra Hybrid
Tax credit available $ 2,758

2009 GMC Yukon Hybrid
Tax credit available $ 2,888

2009 Saturn Aura Hybrid
Tax credit available $ 1,478

2009 Saturn Vue Hybrid
Tax credit available $ 1,765

2009 Tesla Roadster
Tax credit available $ 42,083