Tax Foundation of Hawaii Speaks Out Against Proposed $60 Annual EV Tax


The Tax Foundation of Hawaii is not pleased with the state’s proposed taxation of electric vehicles.



Last Tuesday, Hawaii’s Senate Ways and Means Committee introduced Senate Bill 2324.  If passed, this bill will require EV owners to pay $60 annually as a way to make up for the state’s lost gas-tax revenue.

As Pacific Business News reports:

“The bill says that the owner of a gas- or diesel-powered vehicle who drives 12,500 miles a year will typically pay about $140 in state and county fuel taxes, while owners of electric vehicles pay substantially less in taxes.”

“The Legislature believes it is appropriate to create an electric vehicle user fee to offset the difference in taxes as an interim measure until a suitable mechanism for collected a vehicle miles-travel tax can be implemented.”

The Tax Foundation of Hawaii disagrees with the bill’s “interim measure” wording, stating:

“While the measure states that the proposed fee is an interim solution until a suitable mechanism can be implemented, it should be remembered that once a fee or tax is adopted, it is difficult to repeal.  Once it makes its way in the door, it can be expected to increase in subsequent years.”

We see no issue with this $60 annual fee, as it or something similar is becoming increasingly common throughout the US.  In fact, Hawaii’s $60 tax is on the low side, so we’re not sure why there’s dispute here.

Source: Pacific Business News

Category: General


13 responses to "Tax Foundation of Hawaii Speaks Out Against Proposed $60 Annual EV Tax"
  1. These are becoming way too common. I disagree with them all. It is like charging everyone who doesn’t smoke cigarettes a fee because they are not getting the tax revenue from cigarettes.

  2. Scott Franco says:

    How about AT LEAST making sure the taxes get spent on EV infrastructure (public charging or even charge n’drive roads)?

  3. ggpa says:

    My problem with this tax is that it is based on a principle that is not consistently applied.

    e.g. People without children pay the same taxes even though they do not use schools.

    Anybody who thinks it is justified for tax $60 from each EV for road use, should also take the Pentagon’s cost of safeguarding the oil shipping lanes, and charge ICE vehicles a fee to offset that.

  4. SeattleTeslaGuy says:

    This is totally reasonable. This is a use tax pure and simple. I believe vehicle owners should pay for their use of the roads. As it is, $60 is less than their fair share compared to ICEs. The opponents who favor no tax at all are not being realistic.

    I do think these new levies should be directed towards road maintenance and construction. so the laws should explicitly state that.

    1. A agree in all vehicles should pay a use-tax. The debate is not free vs. fee. The issue is a flat-fee is not a consistent with level of usage.

      Like a gas tax there needs to be some level of use built into road-usage fee structures. VMT (vehicle miles traveled) aka an odometer reading is a consistent measure of road usage.

      1. Spec9 says:

        A flat fee is fine for now. Some sort of road-usage tracking system would end up adding more complexity and cost than it would be worth. Perhaps when there are many more EVs on the road then start a tracking system.

      2. Nix says:

        Brian, there are non-use related highway costs too, that are not based upon miles.

        For example, if you live on a circle that does not see through traffic, the street in front of your house still has to be built, even if you and all your neighbors are retirees, and only drive on it to go to church and back every Sunday. The cost to build that street is the same as the section of main feeder street a few blocks over that has constant traffic.

        The same goes for weather damage that is not directly related to traffic. For example, if there are frost heaves or roads washed out by flood that need to be fixed on a road near you, it doesn’t matter if you drive that road once an hour or once a year, that road has to be repaired, unrelated to miles driven.

        Another example is when they paint the Golden Gate Bridge. It doesn’t matter how many trips you personally take across that bridge, it needs to be painted on a regular schedule so that it isn’t rusted out for that one time you might drive over it. Even if only one car drove over it every year, it would still need to be painted just as often as a million cars a day.

        The amount of wear and tear each car does to the road for each mile it drives is only part of all the total road and highway costs.

        1. Aaron says:

          A flat tax is not ideal for me. I drive fewer than 6000 miles per year. I don’t want to pay the same amount as someone who drives 30000 miles a year.

          1. ModernMarvelFan says:

            How is that different from high MPG vs. low MPG cars as far as road tax goes in your case?

  5. Why do legislatures think introducing a “flat fee” is a great substitute to a “use-based tax”?

    Are legislatures going to change the per gallon tax at the pump to a flat $5 tax per fill-up? How are legislatures proposing to place road usage fees on NG (natural gas), bio, proane, comressed air, or hydrogen powered vehicles? Should there be a fee for ICE vehicles as they drip gallons of lubercation oil on public roads and parking lots dissolving the ash-vault? How about a fee releasing GHG and unhealthy pollution particles?

    eg: Washington state has $45 fee for NG/LNG & propane vehicles, a $100 fee for electric cars and electric motorcycles, but no fee for EREV (extended-range EVs) as they could use gas.
    Think about a person wanting to own an electric scooter to travel a few miles per day, $100 fee is more than yearly fuel bill. Compare per mile cost to a NG taxi driver that drives 150,000+ miles per year. Is this consistent and fair usage fee structure?

    Problem is the current per gallon gas tax was a system introduced in 1930’s as a way to pay for road maintenance of early inter-regional roadways. During ths time petroleum was he dominate fuel for traveling. (Electric vehicles of the time were mostly used in town)

    It’s time to revisit how we pay for road infrastructure via consistent usage fees. Vehicle weight and VMT (Vehicle Miles Traveled) are the most consistent across fuel and vehicle types. We actually have a form of this in place today as toll-roads. (Miles & number axles use as placeholder for vehicle weight). A simple structure reporting odometer reading (annually, or monthly) would be consistent.

    1. ggpa says:

      Why do legislatures think introducing a “flat fee” is a great substitute to a “use-based tax”?

      Because their friends, the lobbyists from big auto want them to think that way.

      The big auto companies will be happy to drive EVs out of business, and they will try all kinds of tricks to do it. Just like they did in 2003.

  6. Spec9 says:

    “the owner of a gas- or diesel-powered vehicle who drives 12,500 miles a year will typically pay about $140 in state and county fuel taxes”

    How many car owners in Hawaii drive 12,500 miles a year?!?!? I doubt they drive nearly that much in Hawaii. They’d all be driving around in circles.

  7. TBill says:

    We just went through this is in VA, and we are charging EV’s a $64/yr fee based on state gaso tax avoided compared to an average 25 MPG car doing 15000 mile per year. VA state gaso tax is approx. 11 cents/gal (actually 3.5% wholesale price). I feel VA is over-charging slightly since…why not compare the EV to a Prius for gaso tax purposes? So VA should have probably held EV fee at $50/yr where I think it was already before we started messing with it again last year.