$42,000 Tax Break for Tesla Buyers
10-22-2009, 10:35 PM
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Don't buy something you don't need just because it's on sale.
Am I the only one who can think of a whole bunch of other cars to buy at $68k BEFORE a Tesla?
Am I the only one who can think of a whole bunch of other cars to buy at $68k BEFORE a Tesla?
10-23-2009, 05:08 AM
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Keep in mind that this isn't just on the Tesla.
The measure gives Colorado residents a credit on their 2009 income tax for up to 85 percent of the difference between the price of certain alternative-fueled vehicles and the price of an equivalent vehicle running on liquid fuel.
10-23-2009, 05:40 AM
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Saki, if I'm not mistaken (and I've seen several hotel commercials about taxes so I know what I'm talking about) you are thinking of tax free, where you aren't charged income tax on money spent. This is how most health care is purchased.
In this case we are talking a tax credit. This is where the government says $1 credit spent here is the equivalent of $1 paid in taxes. Thus if you state income tax was $40k presumably you could avoid paying 100% of those taxes by buying a Tesla. You would pay full price for the car but your tax bill would be reduced by $40k. Assuming an 8% tax rate (no idea what it would be in CO) you need to earn $500k to take advantage of the full rebate. For a Tesla buyer that's probably realistic.
In this case we are talking a tax credit. This is where the government says $1 credit spent here is the equivalent of $1 paid in taxes. Thus if you state income tax was $40k presumably you could avoid paying 100% of those taxes by buying a Tesla. You would pay full price for the car but your tax bill would be reduced by $40k. Assuming an 8% tax rate (no idea what it would be in CO) you need to earn $500k to take advantage of the full rebate. For a Tesla buyer that's probably realistic.
10-23-2009, 06:07 AM
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Originally Posted by rockville,Oct 23 2009, 06:40 AM
In this case we are talking a tax credit. This is where the government says $1 credit spent here is the equivalent of $1 paid in taxes. Thus if you state income tax was $40k presumably you could avoid paying 100% of those taxes by buying a Tesla. You would pay full price for the car but your tax bill would be reduced by $40k. Assuming an 8% tax rate (no idea what it would be in CO) you need to earn $500k to take advantage of the full rebate. For a Tesla buyer that's probably realistic.
Anyways, if it was just about cost savings, I don't think we'd see nearly as many hybrids as we do. In Cali, I was considering one a few years ago, just to be able to use the carpool lane! Then I realized it was better to just move...
10-23-2009, 06:52 AM
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Originally Posted by i_heart_my_DB8,Oct 22 2009, 10:35 PM
Don't buy something you don't need just because it's on sale.
Am I the only one who can think of a whole bunch of other cars to buy at $68k BEFORE a Tesla?
Am I the only one who can think of a whole bunch of other cars to buy at $68k BEFORE a Tesla?
Awww, I miss my s2000. I'm glad she went to a good person.
10-23-2009, 08:05 AM
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Originally Posted by Bboy AJ,Oct 23 2009, 10:51 AM
This is one case where a deduction would be better than a credit for most people.
10-23-2009, 08:13 AM
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Originally Posted by s2000raj,Oct 23 2009, 07:52 AM
At 67k I'd probably buy a new Tesla. At 110k it wasn't worth it to me.
Awww, I miss my s2000. I'm glad she went to a good person.
Awww, I miss my s2000. I'm glad she went to a good person.
)Eh, I guess I just see the Tesla as a novelty, and $68k is too much for my blood for a novelty. I'd rather just grab an Elise and pocket the difference and call it a day. Is a smug sense of self-satisfaction worth the extra $30k? Not to me.
10-23-2009, 08:14 AM
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Originally Posted by Bboy AJ,Oct 23 2009, 07:51 AM
This is one case where a deduction would be better than a credit for most people.
If you could deduct $42k from your income and you have a 4.63% tax rate, you would only save: $1,944.60(as long as you make more than $42k).
Anyone who makes less than $907,127, would have to pay 0 income taxes in the year they buy the car if they get a $42k tax credit. That's a savings of $4,200 @ $100k income, $2,100 @ 50k income.
But since your state income taxes are lower, you will not be able to deduct as much from your federal income taxes. So this stat income tax break needs to be taken at about 70% of face value.