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Screw loose? State offers $42,000 to buy sports car
Posted By Drew Zahn On 10/25/2009 @ 8:02 pm In Front Page | Comments Disabled
It travels 0 to 60 mph in 3.9 seconds and normally costs $109,000, but for Colorado residents willing to fork out for the Tesla Roadster by Dec. 31, the state will kick back over $42,000 in tax credit.
Why would Colorado reward those who can afford a $100,000 automobile with $42,000 – more than the cost of many new vehicles already on the market – to buy a sports car?
Why, because it’s electric.
The state’s tax code gives residents a credit on their 2009 income tax for up to 85 percent of the difference between the cost of an alternative fuel car and a comparable gasoline-fueled model. Given the cost of the Roadster’s comparison vehicle, in this case a Lotus, purchasing the Tesla nets the new owner $42,083 in tax savings.
Or, if Coloradoans would prefer a luxury sedan, they can purchase the Lexus LS 600h instead and pocket a $20,000 tax incentive.
And while high-priced sports-car buyers might find the news welcome, lawmakers in the state have already voiced objections over the size of the Tesla tax break:
“Someone who can afford a $109,000 car does not need a $40,000 tax credit,” said State Rep. Mark Ferrandino, a Denver Democrat, to KMGH-TV in the capital city. “I do think it’s ridiculous that people are buying a luxury car and getting a tax credit that’s equal to, greater than what most people buy a normal car for.”
Colorado’s laws have enabled owners of hybrid automobiles to enjoy tax credits from the state for years. The Denver Post reports there were 6,727 tax filers last year who got credits for alternative-fuel vehicles, costing the state $12.5 million.
But the majority of those filings were on more modest vehicles, like the Toyota Prius or Honda Civic Hybrid, both of which earn buyers roughly $3,000 in tax incentives.
The introduction of the Tesla Roadster, however, has shot the tax credit mile-high, prompting politicians in Denver to pass a new law limiting the amount a car buyer can claim as tax credit to $6,000.
The new law, however, doesn’t go into effect until January, which means prospective Tesla owners only have until Dec. 31 to take advantage of the tax savings.
Not surprisingly, Tesla, a California car company, opened its first showroom in Colorado this weekend.
Tesla spokesman Ricardo Reyes told the Post, “It’s no coincidence that we try to go to markets where they have laws on the books that try to promote clean cars.”
Kimbal Musk, a Colorado resident and Tesla board member, added, “Until it expires at the end of 2009, any Tesla Roadster buyer can take advantage of a pretty amazing tax credit by the state of Colorado to promote electric-vehicle sales in the state.”
And while Mark Couch, a spokesman for the Colorado Department of Revenue, told the paper the state expects fewer than 10 residents to take advantage of the tax savings, Tesla spokeswoman Rachel Konrad told the Post the company sold six of the Roadsters in Colorado last week alone.
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