Colorado Adds Official Tax Credit for Unleaded Aircraft Fuel Modifications
Colorado aircraft owners now have a new,officially recognized state income tax credit to help offset the cost of transitioning aircraft tounleaded aviation fuel.
TheAircraft Modification for Unleaded Fuel Credit is listed by theColorado Department of Revenue (DOR)alongside other established state tax credits and applies to FAA-approved Supplemental Type Certificate (STC) modifications.
What the credit provides
The credit allows aircraft owners to claim50% of the cost of an FAA-approved STC required to certify an aircraft for the use of unleaded aviation gasoline.
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Credit amount: 50% of qualifying STC expenses
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Maximum credit: $500 per aircraft
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Tax years: Expenses incurred from2025 through 2029
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Refundable: If the credit exceeds Colorado income tax owed, the remaining amount may be refunded
Official recognition by Colorado DOR
The credit appears on theColorado Department of Revenue’s list of available tax credits, alongside programs such as employer assistance credits, apprenticeship credits, and home purchase incentives. Its inclusion confirms this is afully implemented, claimable state tax credit, not a pilot program or proposal.
Members can view the credit listing here:
Colorado Department of Revenue – Aircraft Modification for Unleaded Fuel Credit https://tax.colorado.gov/income-tax-credits- (Select“Aircraft Modification for Unleaded Fuel Credit” from the list.)
- Eligibility requirements
To qualify:
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The aircraft must beregistered in Colorado with the FAA
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The aircraft must be registered in Coloradoduring the same tax year the STC expenses are incurred
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The STC must beFAA-approved and explicitly authorize the aircraft to operate on unleaded fuel
Why this matters to general aviation
- While the credit is modest, it reflects Colorado’s recognition that the transition away from 100LL requirespractical, owner-driven solutions—not mandates. For aircraft owners already planning maintenance, engine work, or fuel-system changes, this credit can help reduce out-of-pocket certification costs.
- It also demonstrates that general aviation is being addressed within broader state policy discussions, rather than being singled out or penalized.
What aircraft owners should do
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Retain receipts and documentation related to STC costs
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Confirm Colorado registration status for the applicable tax year
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Consult a tax professional when filing to ensure proper credit application
This credit was created byColorado House Bill 24-1235 and applies to income tax years beginning January 1, 2025, through December 31, 2029.
CPA will continue tracking state and federal developments affecting aircraft owners and will share updates as new guidance becomes available.