Let’s Look At Which U.S. States Impose Electric Car Fees

MAY 4 2018 BY MARK KANE 37

The Sierra Club released a map with states that adopted fees on plug-in electric cars and encourages us to not be fooled into thinking that annual fees on EVs are fair.

Orange Chevrolet Bolt EV and skyline

Chevrolet Bolt EV

Compared to several years ago, the number of states that applied fees to EVs highly increased to 17 and 9 more are considering fees.

In most cases, the fees are from $50 to $200, depending on state and whether it’s plug-in hybrid or all-electric vehicle.

States argue that the less fuel vehicles use, the less money goes to the maintenance of roads, highways and bridges, but Sierra Club points out that the drivers – by purchasing EV – lower emissions within the state.

Read Also – 6 Automakers Closest To Losing The Federal Tax Credit

Moreover, in many cases, the EV annual fees are the same or higher than in the case of ICE cars, while the total amount of taxes is already higher for the state, because EVs are more expensive initially.

It’s definitely something worthy pf our  consider.

Here is full article from the Sierra Club

Don’t Be Fooled: Annual Fees on Electric Vehicle Drivers Are Not “Fair”

In 2015, only a handful of states had fees on electric vehicles (EVs). Today, there are 17 states with newly adopted annual registration fees and nine additional states are considering them — but don’t be fooled: These fees are unfairly punitive for drivers, while barely making a dent in state coffers.

To cover up their own failure to act, some states are trying to create punitive fees for families that drive electric vehicles. This isn’t a solution. It’s punishing people and families who are seeking to reduce their carbon footprint and drive some of the most efficient and fun cars out there. States must act to care for our roads, highways, bridges, and their maintenance, but not on the backs of families who choose to drive electric vehicles.

IS IT FAIR?

Right now, states are trying to impose fees that would charge drivers anywhere from $50 for plug-in hybrids to $200 for fully electric cars. This would be, on average, charging these families $23 more than everyone else. Turns out, EV fees aren’t so fair.

Recent analysis by Drive Electric Minnesota looked at the combination of taxes paid by all vehicles and found that EV owners usually pay just as much or more in state vehicle taxes as their fossil fuel counterparts.

Vehicle ownership and operation contribute to multiple state-revenue streams, not just the gas tax. EVs currently contribute more in excise tax and state sales tax than gas-fueled vehicles, as those taxes are based on a car’s retail value, which is generally higher for EVs than other cars. For example, the fully electric Nissan Leaf S sells for $30,680, and a basic Tesla S goes for $68,000.

Beyond traditional transportation taxes and fees, EV drivers also contribute to electricity sales taxes. Our friends at Acadia Center recently released a policy paper that digs into that and related topics.

Additionally, drivers of gas-fueled cars are not charged a fee on the public costs of the pollution they create, including to our climate and our public health. It is rather disingenuous to claim seeking “fairness” for the costs of road usage but then not to seek fairness for the costs of unhealthy air that harms everyone.

The gag is up. So much for creating a “fair” system.

EV FEES FAIL TO CLOSE BUDGET GAPS

Perhaps most important is that these proposed taxes won’t even make a dent in the budgets that these legislators are claiming they would fix. Maine has an annual $159 million funding gap for roads and bridges, and the proposed fees (the highest in the country) would raise only $2.9 million in 2020 — recovering only a tiny  percentage of its budget deficit. Utah has fewer than 5,000 registered EVs. If its proposed budget passes, it would bring in an additional $400,000 in revenue  — only .02 percent of a $2 billion dollar budget shortfall.

Even in California, the new EV fee is expected to generate only about $200 million over the next decade.

In 2017, the Oklahoma Supreme Court struck down its state’s EV fee, ruling the tax unconstitutional and unjustified. Had H.B. 1449 passed, the fee would have only brought in a million dollars annually to fill a $900 million deficit — helping offset a mere 1 percent of the deficit. Despite last years’ defeat, Oklahoma lawmakers are giving the proposed fee another go in the 2018 legislative session.

MANY OF THESE EV FEE POLICIES ARE CRAFTED BY BIG OIL

It’s no coincidence that this attack comes at a time when EVs are just starting to take off within the larger auto industry. Reportedly, Koch Industries has spent nearly $10 million dollars annually on a campaign to boost petroleum-based transportation fuels and attack government support for electric vehicles because of the risk EVs pose for the fossil fuel industry. The American Legislative Exchange Council (ALEC), a right-wing state-legislation machine funded by the Koch brothers and several other multinational corporations, introduced a resolution to discourage states from providing subsidies for EVs at its States and Nation Policy Summit.

When oil tycoons consider a rise in EV drivers to be a threat to their wallets, you know EVs are taking off.

The truth is that the EV fees popping up around the nation are neither fair nor effective at closing budget deficits. They are, however, likely to affect EV adoption and slow their benefits from being enjoyed by all when the need to incentivize and accelerate the switch to cleaner cars is strongest.

These fees function as a “gas ceiling,” a systemic barrier faced by people who can’t or don’t want to afford punitive fees. People with lower income are disproportionately impacted by air pollution, which includes women, people of color, and the physically disabled. All people deserve to get from point A to point B without suffering from harmful exposure to dirty air — not just the people who can afford the extra costs of emission-free driving.  

Prior to its zero-emissions vehicle (ZEV) fee, Georgia was one of the nation’s most thriving ZEV markets. When the state legislature repealed its $5,000 tax credit in 2015 and imposed a $200 annual registration fee (the largest fee levied on ZEVs to date in the U.S.), sales of ZEVs tumbled by almost 90 percent.

Growth of the EV market is critical for states to meet their responsibilities to provide their residents with healthy air to breathe and a healthy planet to inhabit. At a time when every federal and many state environmental protection policies are under attack  — from emissions standards being rolled back to ending funding for research on toxic chemicals that harm children’s health — we must resist any effort that works as a barrier to expanding zero-emission transportation and instead advocate for fair, effective policies that expand access to cleaner cars and cleaner air. People must be incentivized, not penalized, for switching to cleaner vehicles.

And we know these incentives work. Recently, New York Governor Cuomo announced that EV sales rose more than 60 percent in New York in 2017 over 2016 after a consumer EV rebate of up to $2,000 per driver was launched in early 2017.

If state legislators don’t want to prioritize fair fiscal laws, clean air, or closing budget shortfalls in meaningful ways, then they are forcing our hand. We are left with no choice other than to ban the sale of all gas-powered cars. Just joking! (…or are we?)

Source: Sierra Club

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37 Comments on "Let’s Look At Which U.S. States Impose Electric Car Fees"

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North Carolina has dropped the EV Fee for electric motorcycles. I renewed the registration for my Zero SR back in December and didn’t pay the usual EV fee.

Washington State uses the EV Fee to build out charging infrastructure. I gladly pay the $150 annual fee. https://www.wsdot.wa.gov/Funding/Partners/EVIB.htm

But WA state is the exception here, not the rule.

Personally I’m ok with paying a REASONABLE fee and as EVs become a much greater percentage of vehicles then now it will become a necessity,.

Having said this, the Sierra Club is absolutely correct that much of these attempts are being funded and driven by right-wing interests (the Kochtopus) and Big Oil who absolutely know that EVs (and RE) is a growing and eventually a fatal threat to their money, influence and power.

Maybe in some other states, but certainly not in California. Plug-in vehicles were over 5% of all sales here last year and will probably coast to around 10% as Model 3 ramps up. That’s a not-so-insignificant portion of the vehicles on the road driving around without contributing much to maintenance and upkeep of said roads. As it stands, the fee is not slated to go into effect until July of 2020 (and the way it’s written, there’s a strong argument to be made that anything that isn’t MY2020 is exempt) and is only $100, indexed to inflation. That’s a break-even of under 10k miles/year based on current taxes from the State and Feds.

It does seem kind of weird though that CA is heavily incentivizing EVsto the tune of $2500 at purchase/lease, only to then take the money back over time with a fee. The whole thing seems more than a little contradictory.

Not really, the incentive is for more people to buy EV. They don’t get to wear down the roads for free, they have to pay their share, they already got a big break up front.

CA implemented a gas tax at the beginning of the year to pay to fix roads, its my understanding that the fee on EVs is because EV users don’t buy gas, and thus are not paying to fix the road they are driving on.

Those Greedy 0ld farts should dead long before that ! With any Luck ..Besides., they’ll never run out of money. , The Stupid Money Gluts..

Awesome article from Sierra Club. +++1
This repeated many times.
How anyone thinks it makes sense to charge a fee to a non-polluting car while allowing all measure of black smoke spewing diesel pickups without fees is beyond any form of rational justification.

Notice Texas.
They talk the Republican Plank, but they vote JOBS and Economic GROWTH, while the Red States kill themselves, by believing their own bull.
There’s a lesson there.

Texas: Wind Power = Jobs.

Minnesota has a $75 per year per vehicle fee. Please update. Used to pay for our roads so we don’t look like Detroit in the Winter.

Nice summary. Didn’t know the $50-200 fees had spread so quickly. I guess “vehicle miles traveled”, which would be closer to taxing by use, hasn’t caught on. That’s what stinks with this fee type, it appears. The person driving 6k miles/yr pays the same as the one driving 20k.

Still better than adding a tax to electricity. Probably in the future we will have a milage based ev tax…hopefully.

Didn’t read the article? There’s already taxes on electricity. Also, that electricity used by EV’s locally produced which creates JOBS in your STATE, not in Iraq/Iran/Saudi Arabia.

Not road taxes, isn’t road taxes we talk about here?

Koch Bros fund ALEC spread economically cancerous policy to the red states.

I am pretty happy with a $50 to $150 fee, $200 is pushing it since efficient ICE cars pay less gas tax than that. I don’t want a free ride, just a level playing field.

In NC, the $130 fee is tolerable, $100 would have been more fair to me. I believe we all have to contribute to maintaining the roads.

Don’t forget the property tax which for the generally more expensive plugins is higher.

Until they put a per kWh fee on the meter, a registration fee pays for the roads.

Eliminate the state tax on gasoline and diesel, and charge all light vehicles the same annual fee.

No, the U.S. federal tax on gasoline and diesel should be gradually increased over a number of years to the level it is in Europe, to discourage more gasmobile sales and encourage EV sales.

More specifically, there should be a tax on GHG/co2 emissions. It is the least costly way to transition to a low carbon economy.

I don’t think EV owners mind paying for roads or paying state sponsored charging networks (Washington and Colorado to name two).

It is the states that have recently handed out corporate tax cuts including to oil companies who suddenly claim poverty and fairness as their excuse for EV taxes higher than a gas guzzler pickup truck pays ina year that is pure BS

My home State, the ultra-red Great State of Kansas, managed to defeat a proposed EV tax? WOW, the hard-right GOP in our legislature dropped the ball for once… thank goodness! I wonder how that happened?!?!

Up the EV revolution!

That’s because Kansans will defeat any government fee or tax no matter what it is.

Yes, thank you. I’m kicking myself for not realizing that until after I posted the above comment. :-/

These flat fees are not the direction that we should be going… Personally a fair and level field would be taxing tires for the number of miles that they are warrantied for. This would cover gas and electric cars equally and also represent a real tangible use of our roadways. The biggest issue is that it would be a lump sum tax vs yearly/per fill up. That or during your registration or inspection a mileage count is taken and you are taxed per mile driven….

Should either be a flat per-tire tax or based on the price of the tire.

I don’t see a reason to penalize people for picking tires that last longer – you just risk encouraging people to pick tires that can have fewer miles put on them before they end up in a landfill.

Simplest and most reasonable suggestion in here so far.

Take a Walk , I’ll Tax your Feet….Tax Man !

I don’t mind paying an EV fee for road maintenance and upkeep. However, my preference would be a per-mile fee with a vehicle class multiplier added in (larger, heavier vehicles would pay slightly more because of more roadway wear and tear).

As EV enthusiasts, we can’t proclaim that the EV market is going to take over ICE market while at the same time not implementing ways for us to pay for the roads we all need.

While they make some points about taxes, those other taxes that EV owners pay, do not go toward road maintenance. Their best point is about the untaxed health hazards and environmental impacts that gasoline cars get a free pass on.

In WA the fee is $150.
We has a sales tax exemption on the first $32k for EVs with a base price less than $42k. But that expires in June because it had a cap of 7500 cars which was just reached, and it only lasts through the end of the month. You still qualify if you buy before May 31st.

I hope they will renew this. Gotta write my reps again.

WA is looking at transitioning to a per mile fee. Via transponder, or annual checks, or cellphone app, self reporting, they are looking at options. Per mile fee seems the most fair. But doesn’t then tax out-of-state visitors driving in the state, unless they also keep the gas tax.

They also are expanding the use of tolls to pay for new construction.

BTW – $150 is fair here. The gas tax is about $0.50/gallon.
Average car gets 25miles/gal.
Average driver does about 13,750 miles per year.
13,750/25=550gallons
550×0.50=$225 per year the average ICE owner pays.

But again the biggest problem, is that that may help pay for roads, it does not offset the health and environmental costs of using an ICE.

The cost of tail pipe pollution costs thousands of dollars to the local, state, and federal governments.

Tail pipe pollution increases health costs in a range of area from babies born with neurological issues due to very small pollutants enetering their system through the mothers lungs to premature deaths due to lack of breathing capacity among other issues.

In addition, the nation as a whole needs to spend trillions on far away wars where so many young kids are maimed or killed to maintain its addiction to a natural resource lacking in its borders,

Saving a few dollars in road expenses is at best hypocritical and at worst well…..

This is the 21st century and government officials still can’t tell the trees from the forest in a developed, industrial nation.

They use the roads, they pay for the roads.

Seems like many of us agree on a small EV fee but as this article shows, this won’t have much impact until they are numerous. The real problem is diesels. They are the worst polluters and doing the most road damage by far. We’re just reluctant to raise the costs of delivering our goods and services. Tesla semi could be the game changer but how to tax them too?