A provision in HB1289 extends a tax incentive for electric equipment retailers—and it may affect your fleet upgrade costs.
Most Colorado transportation and trucking business owners don't realize that buried in HB1289—a bill primarily about tax expenditures—is a three-year extension of a tax credit that directly affects the cost of electric equipment they may be considering for their operations.
Here's what changed, and why it matters.
Colorado allows qualified retailers who sell new electric-powered lawn equipment to claim a refundable income tax credit equal to 33% of the aggregate purchase price of that equipment. The credit is effectively passed through as a point-of-sale discount to buyers, meaning the retailer's tax savings translate into lower prices at the register.
For small retailers and equipment dealers in Colorado, this is a direct cost-reduction tool. A retailer selling $10,000 in new electric equipment can claim a $3,300 credit against their state income tax liability—and that savings typically flows back to the customer as a discount on the purchase price.
Under HB1289 (Section 11, page 25, amending 39-22-550), the credit window has been extended from its prior expiration date of January 1, 2027 through December 31, 2029. That gives retailers and buyers an additional three years to take advantage of the incentive.
The credit is now available for tax years January 1, 2024 through December 31, 2029.
If you operate a fleet and are evaluating whether to switch to electric lawn care equipment—whether for site maintenance, grounds upkeep, or other operations—this extension means the financial incentive remains in place longer than previously expected. Retailers must register with the Colorado Department of Revenue and receive approval to claim the credit, so the discount is only available through participating dealers.
For transportation companies that maintain their own grounds or operate equipment rental divisions, the extended timeline creates a longer window to evaluate the business case for electrification without the credit expiring unexpectedly.
If you're considering electric equipment purchases, ask your equipment retailers whether they're registered with the Colorado Department of Revenue to claim this credit. Not all retailers participate, and the discount only applies through approved dealers. The extension through 2029 gives you time to plan capital purchases without rushing to beat an expiration date.
The provision is modest in scope—it applies specifically to lawn equipment, not heavy-duty fleet vehicles—but for operations that use or sell such equipment, the 33% credit can meaningfully reduce acquisition costs over the next five years.
For a detailed breakdown of how this credit works and whether it applies to your specific equipment purchases, consult your tax advisor or contact your equipment dealer directly.
Source: Colorado HB1289, Section 11, page 25 (39-22-550); effective January 1, 2024.