New Jersey Bill Proposes Road-Use Per-Mile Fee/Tax for Electric Vehicles (Video)

4 years ago by Eric Loveday 19

Is a per-mile road use fee/tax the fairest method for collecting lost gas taxes from owners of electric vehicles?

Tesla Roadster Spinning in Circles Would be Taxed Per Circle

Tesla Roadster Spinning in Circles Would be Taxed Per Circle

Democratic Senator James Whelan of New Jersey seems to think so and has proposed a bill (S-2531) calling for exactly that.

The Senator proposes to tax electric vehicles by the mile to pay for lost gas tax revenue, which is essential for road maintenance, but it’s not without controversy.

The proposal, as written, would actually tax electric vehicle owners more than the state’s current gas tax of 14.5 cents a gallon.

As Whelan states:

“Currently in New Jersey, alternate-fueled and electric vehicles don’t pay a gas tax.  For 98% of the drivers with gas-powered cars, they pay a 14.5 cent-per-gallon tax to support the upkeep of roads. The guy driving an electric car doesn’t pay anything.”

In the bill,  electric vehicle owners (plug-in hybrids, too) would be charged a fee of 0.839 cents per mile.  That’s a fee that Steve Carrallas, state director of the National Motorists Association New Jersey chapter, says is too high:

“At 12,000 miles per year, that comes to $100.68.  I did a calculation for the state’s 10.5 cents-a-gallon gas tax for a car averaging 25 mpg that travels 12,000 miles in a year and that comes to $50.40. Why do they want (electric vehicle owners) to pay more?”

Taxes...Taxes...and more taxes

Taxes…Taxes…and more taxes

Yes, there’s a discrepancy between what Carrallas believes the state’s gas tax to be versus what Whelan says it is and we’re not sure why.  But even at the 14.5 cents, electric vehicle owners would still pay more per year under this scenario.

Michael Thwaite, a New Jersey resident and owner of a Tesla Roadster, says he sees no problem with the proposed bill:

“We’ve discussed it, and the consensus is fair. At the end of the day, we’re all car drivers and we still chew up the roads and have a debt to society.”

Thwaite doesn’t even mind if he’s taxed more than drivers of gas -fueled vehicles because electric vehicles are beneficial in so many ways that paying a few dollars more in taxes to own one isn’t really a negative when all the other positives are factored in.

The biggest issue with Whelan’s bill and, similar per-mile taxes under consideration in other states, is in collection.  Whelan says electric vehicle owners will have to track and report their annual mileage to the New Jersey Motor Vehicle Commission.  There will likely be some audits to insure accuracy in reporting and fines for late submissions or under reporting mileage.  This will be difficult and costly for the state, so it’s unlikely New Jersey will profit from such a setup until tens of thousands of electric vehicles are on its roads.

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19 responses to "New Jersey Bill Proposes Road-Use Per-Mile Fee/Tax for Electric Vehicles (Video)"

  1. vdiv says:

    Wait, if taxing per mile for EVs is acceptable, why can’t NJ do it for all vehicles? What is the basis of this discrimination?

    Also one assumes that gasoline taxes go exclusively to a road maintenance fund. That may not be accurate (i.e. it is not accurate for the highway tolls), the money be going to the general fund, similarly to the taxes on electricity used to charge plugins.

    1. ClarksonCote says:

      Exactly. If NJ really believes this is necessary, they should remove all their gasoline taxes, and tax everyone per mile.

      1. kdawg says:

        This is fairer than just charging EV’s a flat rate, but like what you guys said, what’s good for the goose is good for the gander.

        The most fair way to do it would be with toll roads. Then the money should go directly to the roads that are used the most, and it doesn’t matter what car you drive. Obviously large trucks should pay more, due to do more damage.

        What about CNG cars? Do they still get out of having to pay for the roads?

  2. bloggin says:

    They may be on to something…

    I would suggest to remove the gasoline tax all together, and pay a tax for miles driven. Also base rate on vehicle weight and emissions. So big trucks carrying loads tearing up the roadways, and less clean vehicles pay more than cleaner vehicles and EVs.

    Mileage is recorded when new tag is purchased each year, and you pay the previous years tax when buying the new tag. Move to a new state, pay the previous state the tax while getting tag for new state.

    Keep the state road tax the same for all states, so there is no incentive to maintain tag in one state, when all driving is done in state where tax is higher.

    This may be the plan all along……

    To implement something like this, it would have to start with new population that is not using gasoline, and phase in the other groups.

    – EVs would be first to test the process as this bill proposes.

    – Then plug-in hybrids which may get lumped with EVs, as their fuel use will/should be minimal.

    – Then the larger groups, diesel vehicles

    – Then gasoline/hybrid vehicles.

  3. Mark H says:

    I am all for charging for miles driven. Just implement it for all cars. States with inspections can take it from the odometers or better yet, just get over the insecurity issue and track the miles driven. This in the end will be the future. Some will go kicking and screaming over being tracked but such is life. Those same people should be aware that their smart phone and in some cases their credit card is already capable of doing this.

  4. Nelson says:

    First replace the gas tax with a 25% carbon tax on gas.
    If a gallon of pre-tax gas is $4.00 add $1.00 / gallon carbon gas tax.
    Then get road use tax money through EZpass and tolls.
    Use the roads, pay the toll/tax.

    NPNS!

  5. Open-Mind says:

    Has anyone double-checked the math? Something doesn’t make sense.

    0.00839 cents/mile X 12,000 miles/year = 100.68 CENTS/year, not 100.68 DOLLARS/year.

    Unless I’m missing some “mundane detail” (love “Office Space”), the gasoline tax is about 50 times higher than what’s being proposed for EVs.

    But I agree with others that the gasoline tax should be eliminated in favor of a vehicle mileage fee. Same rules for all vehicles, regardless of its propulsion mechanism.

    1. kdawg says:

      It’s 0.839 cents/mile

      “Every passenger vehicle registered and titled in the State shall be subject to a vehicle miles traveled fee in an amount equal to 0.83906 cents per mile.”

      http://www.njleg.state.nj.us/2012/Bills/S3000/2531_I1.HTM

      1. Open-Mind says:

        Thanks for the clarification.

        I think a half-cent per mile would be more reasonable … assuming it applied to all vehicles instead of the gasoline tax.

  6. Steven says:

    Perhaps a silly question but, how do they propose tracking how many miles are driven in state? What if a person lives in New Jersey, but works in Pennsylvania? Or even the reverse, lives in PA, but works in NJ. I use to do that myself. Yeah, talk about a halfbaked idea.

    1. Rashiid Amul says:

      Thank you. That’s exactly what I was thinking.

      I personally hate this idea. It’s too early in the EV cycle to do this.
      There are hardly any EVs out there. Yes it’s a growing segment, but still less than 1%.
      I see this tax as a punishment right now.

    2. Mark H says:

      A simple chip the same as found in your mobile phone, GPS is capable of this. You could easily tell what state you traveled or what road and tax accordingly. Most new cars have it and would be extremely simple/economical to add. This would eliminate the need for toll booths as well. Technologically speaking this is a piece of cake. The hang up is the “big brother is watching you” syndrome. This is what people are fighting.

      While the EV fleet is relatively small and waiting on people to overcome this fear you would simply take the odometer reading in the state in which you live. The current system is no different. You pay the gas tax at the pump, not where you drive.

      The tracker is superior, but like the EV itself, don’t expect people to understand and accept it overnight.

  7. Kickincanada says:

    They should tax all cars by the mile otherwise those like me who have a Volt would be penalized unfairly as I only drive about 55% electric with the rest gas.

  8. Simpleton says:

    I love the idea of making it “fair!” Let’s make it as complicated as possible, track everyone so they fear big brother, and then watch it be hacked/loopholed/whatever so the followers of the scheme are the ones that end up screwed. How about we just accept that some will use the roads more, others less, as is the current case, and charge a flat fee on all vehicles every year during licensing to pay for the roads and move on? $50, $100, whatever for ALL cars… We aren’t talking about huge sums of money and the cost of implementing is so small that a lot more revenue would actually go to the roads or whatever the politicians claim it will be used for.

    Admit it, fairness ain’t gonna happen, so lets not pretend.

    1. kdawg says:

      “Just accept it!”. Same thing could be said about a lot of things (birth control coverage comes to mind). But what I see here is another paper cut by the anti-EV group towards their goal of the death of the EV by a thousand cuts. Maybe this is a case where the party of “NO” should actually say “NO”.

      1. Open-Mind says:

        Do you mean the democrat party of no? Because this bill is being pitched by a democrat.

        1. kdawg says:

          However it gets shot down is OK by me. In New Jersey the Dem party should take care of it since they are 60/40 in both houses. I don’t think the Rep. can do it alone, but sure of the NJ Constitution.

      2. Simpleton says:

        Kdawg-
        I am not advocating “Just accept it.” The exact opposite, actually. Thank the lawmakers for a great idea and push forward and implement a road use fee (don’t call it a tax!) on all vehicles regardless of drivetrain/fuel. They can keep the gas taxes where they are at and re-label as something like smog tax or whatever.
        I find this similar to paying property taxes that pay into the county parks and the city schools, even if I don’t visit the parks or have kids attending the schools (I actually have kids and we do use the parks, library, etc.). If I pay for schools or parks, I benefit because their are smarter, happier people around me–I live in a better community. Likewise, if I pay for roads without driving more than around 9-11,000 miles each year, while others drive 30,000 miles on those same roads, I still benefit–both directly and indirectly.

  9. psucro says:

    At a time, when we are trying to promote the Electric Cars, and other NON-Gasoline methods of travel, the politicians are trying to Tax the electric cars.
    This should be a non-issue, and not even become part of legislation until 10-25% of cars are electric. Then maybe a bill should be introduced.

    I view as missing the Gas tax, as a benefit, and reason to switch away from Gasoline travel. This generally promotes the sale of Electric Vehicles.

    Now it will just put another negative on driving an electric car.

    Also we are currently taxed, on the usage of electricity. Maybe some method of measuring electric usage, and taking some of that tax for Road Work would be more appropriate. Taxing gasoline makes more sense, since most of the GAS used will use close to the purchase location.

    I thought the original tax on Gas, was to pay for roads, and reduce the usage of Gas.