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.

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:

Video: WISHTV