Should There Be an EV "Tax Penalty"?

[eddiet1212]

Should there be an EV "Tax Penalty"?

Do EV owners really have a lower tax rate per mile than ICE owners when EV owners pay multiple taxes (energy, sales, registration, etc)?

Are the new EV fees a double taxation for EV owners?

What is the tax rate per mile when ICE owners pay "gas tax"when they purchase fuel?

There is a decline in "gas taxes"......

Special Registration Fees for Electric and Hybrid Vehicles

"...Vehicle registration fees are a reliable source of funding for state transportation systems. The increase in fuel-efficient gas-powered motor vehicles, alternative transportation options, and the increased presence of electric vehicles (EVs) and hybrid vehicles is contributing to a declining gas tax—the primary state revenue source for transportation.

As the number of electric and hybrid vehicles on American roadways increase, state legislatures have imposed additional registration fees for such vehicles on top of traditional vehicle registration fees

On the link you will find a map highlighting which states require a registration fee for EV and hybrid vehicles.

Under the map, there are additional details on statutes, fees, definitions, and how revenue is distributed in each state...."

https://www.ncsl.org/transportation/special-registration-fees-for-electric-and-hybrid-vehicles

EVs and the Highway Trust Fund: Five Things to Know

"...While fixing infrastructure funding has not been a focus of the tax expiration debate, it would be a smart way to pay for at least a small portion of the expiring tax cuts. In recent years, highway funding has exceeded highway revenues, and the introduction of electric vehicles has made the gas tax increasingly obsolete.

There are bills in both Houses of Congress to address this problem by putting a one-time fee on new electric vehicles. This proposal is a start, but fully replacing the gas tax with a tax on vehicle miles traveled (VMT) would be both a better solution and a stronger revenue option for extending the expiring tax cuts...."

EVs and the Highway Trust Fund: Five Things to Know

In recent years, highway funding has exceeded highway revenues, and the introduction of electric vehicles has made the gas tax increasingly obsolete.

taxfoundation.org

 

[chucchinchilla]

California registration on our ID.4 this year was $734 while my A6 was $241. According to ChatGPT the X3 that our ID.4 replaced would have racked up $400mi in gas tax a year so for stupid math take my A6 registration plus $400 and you get $641. We're still paying a premium on top of that but quick math says it's not that far off actually.

 

[cyure]

That is one thing that was cheaper moving from California to Illinois. Car registration here is $151 a year, doesn’t matter the vehicle, and apparently for an EV it’s $251. My reservation is for the harvester and I’m not sure what they will consider that when the time comes. I guess I will find out.

 

[J Alynn]

I don’t mind a small tax and a one time fee is fair but individual states are now tacking on annual EV fees to cover things. How about a one time fee, no individual state fees and add 2-3 cents more per gallon of gas to help encourage people to buy more fuel efficient vehicles. Not like the oils companies aren’t rolling in money

 

[THil08]

I would want to know where the money is going if its state fee, especially after knowing that NJ has been scamming us drivers for years with tolls. we were told that the money goes to the road maintenance. Well, it came out that the tolls only pay the toll booth attendants, which only makes sense since every time their wages go up our tolls raise like crazy.

 

[AlanL]

This is a really interesting question. I don't know, but do gas taxes go towards road maintenance? If so that is a more equitable usage based model. EVs are heavier so might be expected to contribute more wear to the roads. Should there be an EV charger use tax to make things fair? A tax on vehicle miles traveled, including weight, would be the most fair. But how would that be applied? Does every vehicle get an annual mileage inspection? A state based mileage tax won't factor in interstate travel, a charger tax would somewhat.

 

[Scoutsie]

In response to the question “Should There Be an EV Tax Penalty?” then yes, I mind. That’s stupid. I understand “but the weight,” but that seems extremely dubious. It’s apparently done to offset loss of gas tax revenue. Boo hoo. Tax the charging stations if it hurts so much, whiners. Stuff like that should be applied evenly.

Edit: clarity… my apologies, AlanL! I was not attacking you, I was having a knee-jerk reaction.

 

[Cranky Canuck]

This is a really interesting question. I don't know, but do gas taxes go towards road maintenance? If so that is a more equitable usage based model. EVs are heavier so might be expected to contribute more wear to the roads. Should there be an EV charger use tax to make things fair? A tax on vehicle miles traveled, including weight, would be the most fair. But how would that be applied? Does every vehicle get an annual mileage inspection? A state based mileage tax won't factor in interstate travel, a charger tax would somewhat.

General speaking no, gas taxes don't go towards road maintenance. They go into general revenue just like other taxes.

Here in Ontario Canada we don't pay a registration fee anymore and there are no special taxes on EVs. Our gas tax goes to pay for extra stuff the government wants to do like built public transit lines and stuff but it's not seen as a dependable revenue stream like income taxes are. It certainly doesn't go to road maintenance, that whole idea is largely a myth designed to justify adding disincentives to make EVs less attractive than conventional cars. EVs are SO much cheaper to run that it's almost unfair to compare the running costs of an EV to a combustion car.

Also the lost revenue from gas taxes due to EV adoption is still so small it's barely measurable, so that whole argument is just fearmongering at this point. One day EVs will be dominant and gas tax revenue will be in decline but we are a long way from that at this point.

 

[chucchinchilla]

Yes, I mind. That’s stupid. I understand “but the weight,” but that seems extremely dubious. It’s apparently done to offset loss of gas tax revenue. Boo hoo. Tax the charging stations if it hurts so much, whiners. Stuff like that should be applied evenly.

Cool that means I get to skip paying the majority of my fuel tax since 95% of our charges are not done at public charge stations.

 

[J Alynn]

This is a really interesting question. I don't know, but do gas taxes go towards road maintenance? If so that is a more equitable usage based model. EVs are heavier so might be expected to contribute more wear to the roads. Should there be an EV charger use tax to make things fair? A tax on vehicle miles traveled, including weight, would be the most fair. But how would that be applied? Does every vehicle get an annual mileage inspection? A state based mileage tax won't factor in interstate travel, a charger tax would somewhat.

Good questions. My husband understanding is some gas tax is pulled for interstate work but to actually know ???

 

[Cranky Canuck]

Cool that means I get to skip paying the majority of my fuel tax since 95% of our charges are not done at public charge stations.

You still pay tax on your home electricity so you still pay some tax on what you drive but basically yes.

Here in Canada we have a carbon tax (for now) and some people are always whining and complaining about it and I just ask them if they've ever considered not having to pay it? Like if you hate paying the tax so much change your behaviour so you don't have to pay it anymore! It's not complicated. Stop burning fossil fuels and then you don't need to pay the tax anymore.

I haven't directly paid the carbon tax since 2021 when we cut the gas line to our house and switched to a cold climate heat pump. We've been driving EVs since 2017 so haven't paid the gas tax since then. I still get the carbon tax rebate cheques though, pure gravy! That's how monetary and pricing incentives are supposed to work. Use the invisible hand of the market to modify behaviour that is more socially beneficial.

 

[J Alynn]

This is a really interesting question. I don't know, but do gas taxes go towards road maintenance? If so that is a more equitable usage based model. EVs are heavier so might be expected to contribute more wear to the roads. Should there be an EV charger use tax to make things fair? A tax on vehicle miles traveled, including weight, would be the most fair. But how would that be applied? Does every vehicle get an annual mileage inspection? A state based mileage tax won't factor in interstate travel, a charger tax would somewhat.

But what about larger pick ups and their weights vs road repair. They don’t technically pay more even though their tanks are larger so more fuel, more tax but that’s based on pump use rate not knowing how much the vehicle weighs. PA also has the joy of all the road damage done by Amish horse and buggies and my understanding is they don’t pay shit for any of that

 

[chucchinchilla]

You still pay tax on your home electricity so you still pay some tax on what you drive but basically yes.

Absolutely but it would be less than targeted taxes at public charging stations. Most other EV owners would draw the same conclusions as well meaning we'd ultimately be back to square one.

 

[Scoutsie]

Absolutely but it would be less than targeted taxes at public charging stations. Most other EV owners would draw the same conclusions as well meaning we'd ultimately be back to square one.

Call me short-sighted, but I’m not seeing the problem if you then increase the tax on home electricity as well by a percentage point or two. People without EVs apply for a rebate? Nobody’s asking me to create public policy, I’m just posting stuff on the internet over here.

 

[chucchinchilla]

Call me short-sighted, but I’m not seeing the problem if you then increase the tax on home electricity as well by a percentage point or two. People without EVs apply for a rebate? Nobody’s asking me to create public policy, I’m just posting stuff on the internet over here.

The goal of the gas/diesel tax is to have something use based but that only works because that fuel type is purchased at regulated resellers. Harder to do use based with electricity since it can be had anywhere meaning you can't just tax public chargers because people will just skirt that system.

 

[AlanL]

Yes, I mind. That’s stupid. I understand “but the weight,” but that seems extremely dubious. It’s apparently done to offset loss of gas tax revenue. Boo hoo. Tax the charging stations if it hurts so much, whiners. Stuff like that should be applied evenly.

Obnoxious insults aside, roads need maintenance and that costs money. It is reasonable for some portion of that to be usage based.

 

[THil08]

But what about larger pick ups and their weights vs road repair. They don’t technically pay more even though their tanks are larger so more fuel, more tax but that’s based on pump use rate not knowing how much the vehicle weighs. PA also has the joy of all the road damage done by Amish horse and buggies and my understanding is they don’t pay shit for any of that

Do the Amish at least pick up the horse shit? lol.

 

[J Alynn]

Do the Amish at least pick up the horse shit? lol.

Nope. Part of the charm of Lancaster County. Warm steaming road apples on a crisp fall morning. I can see the commercial already . They are a vital part of Lancaster county-they are a huge tourism source. They are hard workers, they are VERY SAVVY business people (never let them fool you). They are entrepreneurs but they get treated differently and somehow they / we all make it work

 

[cyure]

Nope. Part of the charm of Lancaster County. Warm steaming road apples on a crisp fall morning. I can see the commercial already . They are a vital part of Lancaster county-they are a huge tourism source. They are hard workers, they are VERY SAVVY business people (never let them fool you). They are entrepreneurs but they get treated differently and somehow they / we all make it work

I get an Amish turkey for Thanksgiving every year. There’s a butcher shop here in Illinois that takes orders and they get so many they have a refrigerated semi parked in front of the store. I end up spending $100 on that bird and it’s delicious. Free range and all. I tell my husband it was happy turkey before it made it to our dinner plate that why the insane cost.

 

[J Alynn]

I get an Amish turkey for Thanksgiving every year. There’s a butcher shop here in Illinois that takes orders and they get so many they have a refrigerated semi parked in front of the store. I end up spending $100 on that bird and it’s delicious. Free range and all. I tell my husband it was happy turkey before it made it to our dinner plate that why the insane cost.

Did the same this past year but was like $70. Apparently different Amish because short of not having to thaw it for 4 or 5 days it didn’t taste any different than a butterball frozen carcass. Our Amish must not use free range