Indiana Next To Attempt To Tax Plug-Ins And Hybrids (Video)

FEB 19 2013 BY STAFF 14

Randy Frye (R), who represents Indiana District 67 Is Not The Most Popular Guy Amongst Alternative Fuel Vehicle Owners

Randy Frye (R), who represents Indiana District 67 Is Not The Most Popular Guy Amongst Alternative Fuel Vehicle Owners

Indiana’s state motto is “The Crossroads Of America.”  The definition of a crossroad is “a point at which a crucial decision must be made that will have far-reaching consequences.”    Perhaps the state’s motto has never rang more true.

It was Washington State who first initiated a tax on electric vehicles at this beginning of this month.  All pure EV owners in that state are now subject to a $100 annual fee in lieu of road taxes not paid when filling up at the pump.

Indiana - "Crossroads Of America"

Indiana – “Crossroads Of America”

Then Virginia got into the act; but they took it a step further by proposing to eliminate the gas tax altogether, partly because of the effect of a rising state-wide MPG number, and partly due to the arrival of the fully electric and plug-in hybrid vehicles.  Virgina proposes to simply raise the state’s sales tax by 16% to 5.8%.

Now Indiana has there own cash grab solution to generating more road tax revenues.

Namely, by making not only fully electric vehicles pay a special road tax, but any alternative fuel vehicles, including standard hybrids, and plug-in hybrids (like the Chevrolet Volt and Ford C-Max Energi).  A $100 annual ownership fee has been proposed.

Currently in Indiana there is a 16 cent a gallon tax that goes into road improvement.

State Lawmaker Randy Frye (R) says this new tax is a must have for Indiana,  “All of us need good roads and we have to pay for those roads one way or another. Unfortunately, that is a tax…what we are trying to accomplish here is no matter what vehicle you are using, the tax is the same.”

The bill has already passed the Roads and Transportation committee in Indiana (unanimously) and the House Ways and Means Committee will vote next week.  From there,  the bill will head to the House floor for final approval.  A set dollar amount and specific vehicle cut-off thresholds will be set after approval.

Like some other state’s plans to get their fair-shake from everyone who uses public roads, it seems reasonable on the surface.  But when taken in context with the federal government’s (and CARB’s) mandate to encourage the purchase of plug-in, and other highly fuel efficient vehicles, it makes little sense at all.

We currently have one branch of the government (Federal) giving up to $7,500 in credits to make these vehicles more accessible to own, while many other states (like California) have also sweetened the pot by expanding that rebate, as well as giving incentives like HOV lane passes and deep discounting of plug-in charging stations.  Meanwhile, other, more opportunistic states, are using plug-in vehicles, which have only the thinnest of representation on the road today, as a spring-board to increase revenues right across the board.

Perhaps its time for the US to get its house in order, and let it be known that specialized taxes on plug-in vehicles are off limits, at least until the day when price-parity has been achieved, and they can compete on even footing with their gas cousins.

News report on the proposed tax by WISH TV below:


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14 Comments on "Indiana Next To Attempt To Tax Plug-Ins And Hybrids (Video)"

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I find it interesting that this effort is being championed by a Republican. Given thier “typical” stance on not raising taxes. Clearly, they are looking for more ways to bring EV’s down given thier allegiance to big oil.


That’s a road use fee and everyone has to pay. The $100 amount is simply added so as not to not create yet another system (expensive and intrusive) to determine the precise amount of EV road use.

Count your large tax rebate for purchasing one and be thankful.

Jon B

The effort in Washington State (where I live) was championed by Democrats. Don’t be fooled that this is only a Republican movement.


I am not surprised one bit, let’s hope it’s a failed attempt.


Is a good signal, the petrol lobbys are afraid of the electric cars…with reasons.


So did I get it right – these 100$ are for every car including normal ice ones? Do the 16Cents a gallon disapere then? 100% road tax for ices now and some gradual rise for green cars would have been better imo.

Jay Cole

As I understand it, the proposed tax ($100 or w/e it ends up being) would be on any non-traditional ICE vehicle. The 16 cents stays as is.

Anthony Fiti

I’ll end up not paying $250 (state+federal) in gas taxes so if they want their money back, switch to VMT.


Being that EV’s are 0.0000001% of the market (I may have exaggerated there), this seems like politicians taking the EV buzz as an opportunity to adjust the tax code in their favor. I would like to see the math that shows the same amount of revenue will be generated as before, and as equally as before. A $100 flat fee for someone that doesn’t drive very much seems like an unfair scam to me. How are they going to make sure the sales tax $ goes towards roads and not someone else’s pet project (or salary raise)? If you want to make it fair, put camera toll roads everywhere and send everyone a bill at the end of the month. That way, the people that use the roads pay for them.

Let’s put this in perspective. This tax comes to 27 cents per day, or the tax on 1.7 gallons of gas. If you can afford an expensive EV, you can probably afford that. I’m a little more concerned about my large and growing share of the US national debt (now about $50K), which has gone up a lot since President Obama was elected (then about $30K) and since President Bush’s first election (then about $15K). As for the fairness issues … most taxes are not fair, and nobody likes paying them. Is it fair that ICE drivers help pay for free charging stations? Is it fair that mandated cell-phone taxes provide free cell phones to deadbeats and drug dealers? Is it fair that my property taxes educate other people’s children? Nope, nope, nope. IMHO, EV owners need some skin in the game too, and this is not a bad short-term solution. Longer term … maybe eliminate both the gasoline tax and the EV tax, then add a mileage-based surcharge to your state’s vehicle license plate renewal fee. That might be fair … except for people who mostly commute out of their state … and fraud from those who lie or… Read more »
“Let’s put this in perspective. This tax comes to 27 cents per day, or the tax on 1.7 gallons of gas. If you can afford an expensive EV, you can probably afford that.” ———- Sally Struthers, is that you? 🙂 I think buying an “expensive” EV should be enough for my part to the help the transportation system and our state/national problems. Why squeeze another $100 out of me? The Leaf isn’t that “expensive” anyway. Using this reasoning, how about a progressive sales tax based on how expensive of car you buy? If you buy a $250,000 Ferrari, you have to pay $5000 in road tax $, even if you never drive your car. Surely you can afford this if you are rich (this is TIC). I’m sorry there are more efficient/smaller cars on the roads, and the states are getting less gas tax revenue, but smaller cars also damage the road less. $100 fee is pointless. I don’t drive enough miles in 1 day to justify 1.7 gallons of gas use. Tax the people that use the roads and abuse them, heavy vehicles that put on a lot of miles. If I buy products that require shipping by semi-trucks,… Read more »

You’re good at sarcasm and knocking down straw-man arguments … I’ll grant you that. I hope when I buy my Spark EV, it doesn’t come with such strong feelings of self entitlement. I hope I still expect to pay for the “crumbling roads and bridges” that President Obama keeps telling me about, but somehow never fixes. I must be lucky, since the roads and bridges I use are still pretty good. 😉

Bill Howland

Seeing as there are almost no public stations in western ny, they can’t say free charging stations are paid for by gas powered vehicles.

As a Volt owner I’m going to be doubly penalized since the car automatically uses gas in cold weather AND I have to pay an EV tax.

How much you want to bet its not going to stay at $100?

Besides, I rarely use any of the public stations in the first place, and If asked should my taxes go up to pay for them, I’d have said, no don’t install them, I’ll make my own arrangements for when I think I need a little bit of juice far from home..


Why I live in this backwards state is beyond me.