Several states charge owners of electric vehicles a fee that experts and consumer advocates claim is higher than those paid by drivers of gasoline-equivalent gasoline vehicles, which could discourage important technology respectful of the environment.
Almost all states apply gasoline taxes to finance transportation projects. The owners of electric vehicles avoid them because electric vehicles do not consume gasoline. But many legislatures are considering additional fees to ensure that all vehicle owners pay for the roads.
A new Consumer Reports analysis shows that of the 26 states that currently apply EV charges, 11 charges more than the amount that gasoline-like car owners pay in gasoline taxes, and three charge more than double. And the trend is potentially to increase taxes on electric vehicles: among the 12 states reviewing proposals, ten would have higher taxes than a driver would pay on average gasoline taxes. Seven of these states would increase fees over time to twice the amount.
PENNSYLVANIA EV TAX PROPOSAL
Pennsylvania House Bill 1392 on electric cars in Pennsylvania proposes to set a poorly designed state tax on “alternative” transportation fuels by imposing duties on electric vehicles while leaving other types of alternative fuel vehicles subject to imperfect tax. In its initial version, HB 1392 provided an annual fee of US $150 for non-commercial electric vehicles. In September, the House amended HB 1392 to increase the fee to $250. (The House also added $75 for hybrid electric vehicles that use electric batteries as the “primary source of energy”).
The federal electric car tax credit (or EV tax credit) can be used by buyers and electric cars, or by the car dealership to reduce the base price of a lease. This effectively reduces monthly rents within comparable or even lower ranges than comparable gasoline vehicles.
The co-sponsorship memorandum for HB 1392 indicates that the alternative fuel tax is “confusing and difficult to administer,” and that most electric vehicle owners do not pay the taxes they owe “because that the payment process … is tedious or are not aware that they have to do it.” There is no doubt that the alternative fuel tax is confusing, and NRDC understands that some electric vehicle owners (and other owners of alternative fuel vehicles) are not paying all the taxes they should. This is a problem that the General Assembly should resolve so that drivers of all vehicles pay their fair share for Pennsylvania’s transportation infrastructure.
The question, however, is what is right?
Is it right to charge fees for electric vehicles while leaving all other alternative fuel vehicles subject to the alternative fuel tax (and probably also underpayment to the Ministry of Revenue)?
Is it right to impose these fees in addition to the taxes on the gross receipts paid by electric vehicle drivers and by drivers of other alternative fuel vehicles?
Is it right to suggest that electric vehicle drivers pay taxes comparable to those paid by the owner of a “gasoline car” in gasoline taxes since this average includes many gasoline drinkers who pollute much more air in Pennsylvania than electric vehicles?
The answer to these questions is no. And there are better ways to tax electric vehicles and pay for transport infrastructure.