Michigan’s Road-Use Fee/Tax on Hybrid and Electric Vehicles Now Hotly Debated Topic in House Transportation Committee


Nearly two months ago, Michigan added itself to the growing list of states seeking to make up for gas tax shortages by charging owners of alternative-fuel vehicles an annual road-use fee.

The proposed bill in Michigan calls for electric and “alternative fuel” vehicles weighing in at under 8,000 pounds to be taxed $75 annually in road-use fees.  Vehicles fitting the above categories, but weighing over 8,000 pounds, will be required to pay an annual fee of $200.

That bill is now a hotly debated topic in Michigan’s House Transportation Committee.tax-shake

Officially, it goes by the name of House Bill 4632 and there’s now some additional details we have to share.  In addition to what was touched upon above, the bill calls for an increase in vehicle registration fees by approximately 20 percent, raising motorcycle registration fees and reduced annual depreciation.  This will definitely bring in more money for the state to use to maintain its roads and this portion of the bill doesn’t seem to be under debate.

What is under debate is the annual fees charged to drivers of alternative-fuel vehicles, especially since several of these automobiles, most notably the Chevrolet Volt, are built here in Michigan.

Brian O’Connell, General Motors regional director of state government affairs, testified against the proposed fee for hybrid and electric vehicles, saying that it could actually hurt sales of of vehicles like the Volt, which GM has significantly invested in.  It seems O’Connell’s actual argument is that, had GM known such a bill would be proposed, the automaker might have reconsidered launching a vehicle like the Volt.

Additional arguments against the proposed bill focus on aspects such as the fact that most hybrid and electric vehicle owners in Michigan already pay higher annual registration fees due to the higher initial purchase price of the vehicle.  Other arguments say that some hybrids (a GMC Yukon Hybrid, for example) still burn through way more gas than, say, a Volkwagen Jetta TDI.

The main problem here is one of fairness.  Any proposed bill must be fair to all and that’s an issue several states are now dealing with as they try to pass these annual-fee-for-electric-vehicle laws.  There will be resistance along the way, but hopefully a fair-for-all solution can be found.

Source: MLive

Categories: General

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12 Comments on "Michigan’s Road-Use Fee/Tax on Hybrid and Electric Vehicles Now Hotly Debated Topic in House Transportation Committee"

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So someone who drive’s a Leaf 5000 miles/year has to pay an extra $75 flat fee for roads they barely use.

Michigan, if you want people to pay for the roads they use, put up toll roads. You don’t have to look too far (see I-pass).


Oh, and since I use more electricity in my EV than those efficient homes that drive gas cars, I think they should have to pay a $75 flat fee to cover the costs of the grid infrastructure which they use to power their TVs.

I drive a Volt and would have no problem paying a VMT (vehicle miles traveled) tax, in lieu of a gas tax.

State imposed gas TAX to raise money for State road repairs was not a bright idea to begin with. If I fill-up my 28MPG Malibu in Auburn, IN and drive through Michigan on my way to Canada I use the Michigan roads without buying any gas in Michigan. We need to eliminate all Federal and State GAS TAX and deploy a country wide 21st century electronic toll collection system. All cars would need to come equipped with a transmitter linked to an owner’s credit card or bank account. (No money? Stay off toll roads.) Out of country cars could pay a road use fee at borders. If a car crosses the toll without a transmitter an automatic picture of the license plate could verify if the car is from another country. If not a fine could be issued to the owner. No need for toll ticket or payment lines one transmitter is good on all toll roads country wide. This type of infrastructure improvement is what I’d like to see done with my federal taxes instead of paying for wars.


I agree that a “usage” tax is much preferred to a “fuel” tax, as we move to a more “diverse” set of “fuel” choices besides gasoline (BEV ,PHEV, LNG, Bio, etc.) – The trick is HOW to track milage – Making all the world’s toads toll-toads with EZpass/IPass seems expense infrastructure to me and potentially has privacy concerns (as well as any GPS “phone home” sort of thing)… – This is sort of a “hot button” for me, given VA’s recent changes (which are now law..) In lieu of tolls, how about a simple – “check the odometer” during the state inspection – And the differential mileage for the year is taxed at some rate – and added to the inspection bill – The state gets the total miles the car traveled, also increase fees for missed inpections/expired stickers as this would have an tax impact now, and we basically just “adding this fee” to an existing “transaction” for the consumer – No additional EZpass stuff required – Just the mechanic reads the odometer (which I think already happens) – The revenue is “spread out” thru the year for the state, given that variety of when inspections are due and… Read more »

Even though I drive less than 5000 miles a year, if I had (when I get) an EV, I would still rather pay a flat $75/year than have to go through mileage tracking, toll tracking, anything that has the potential to invade our privacy beyond what is needed.

Guyman, many, if not most, southern states don’t do vehicle safety inspections (something to think about when driving in the south), they only do emissions inspections, and these can usually be done every other year instead of every year. Of course, EVs won’t need to do that.

Other than that, I agree totally with your Idea, and your last paragraph.

Michigan has no inspections, of any kind.

How much would it have to cost you before you preferred tolls? $200/year or $300/year? You know once this thing is created it will never go down, but only increase every year as less gas is used and they if they can get away with it.

What you do in your car may be private but once you’re on the road anyone can see what you’re doing, how you’re driving, and where you’re going. Sometimes there is no such thing as privacy, especially when you’re out and about in public. Forget “big brother watching” because your neighbor already is.


Dosen’t the US Fedral Gov. ends up saving money for not importing oil? So why tax the people? Why not give them money like the federal gov. gives $7500 per electric car. Or is the quality of the clean air not worth any money? How much money does a state ends up saving in hospitals from the polution of gasolin car?

A straight $75 or $200 fee for ‘alternative’ fuel vehicles will never be fair.

There needs to be a rate scale based on already defined Vehicle Class, Drivetrain(hybrid/plug-in hybrid/EV/Diesel/etc) and Vehicle Use(personal/commercial), and Annual Miles Driven(odometer verification).

Then take into account that plug-in vehicle owners will pay more of the Utility Tax. 5% Utility Tax is added to the electric bill in Detroit for example.

A person driving 8k miles a year, should not pay the same road use tax of someone driving 15k to 30k miles per year who use more of the roads.

I don’t want more toll roads; especially when some are now owned by foreign entities. First, update gas/diesel tax for road maintenance. Next, use weight of vehicle & mileage from odometer annually for all vehicles as well to supplement shortages from gas tax (each year increase gas tax; since we want to use less carbon, and decrease weight/mileage tax as needed). Good roads/bridges benefit everyone through less vehicle maintenance and better efficiency JMO. BTW I really love driving on rubberized asphalt.

Oh wow. Thanks again michigan. This REALLY wants me to move out of the state after I’m done with college.

HOW ABOUT THIS. Stop TAXING the crap out of us citizens, and MAYBE MORE OF US WOULDN’T MOVE AWAY.

So we TRY to help the environment, and you MAKE US PAY A FEE TO DO SO?