Extra Fees on Electric Cars; Is This Fair?

June 8, 2018

Nobody likes paying gas taxes, and that seems particularly true for drivers who do not buy gas—such as those who drive electric cars.

 

As legislators have begun to notice more electric cars on the roads, more of them have become concerned about their drivers not buying gas—and not paying any gas taxes.

 

According to a new editorial by the Sierra Club, 17 states have now instituted new fees on electric cars—fees that other car owners don't have to pay—to try to recoup some of the money that electric-car drivers don't pay in gas taxes.

 

Since every state in the union relies on gas taxes to fund road construction and repairs, the argument has been that electric cars use roads just as much as gas-powered cars do, so their drivers should pay their fair share toward road improvements.

 

State gas taxes range from a low of 12.25 cents per gallon in Alaska to 58.2 cents in Pennsylvania. These taxes are levied on top of the 18.4 cents per gallon federal gas tax, which is also supposed to be passed back to states to fund highways.

 

Yet highway funds in many states are running low, making ripe revenue targets of any drivers who do not pay gas taxes.

 

In addition to the 17 states that have already added fees for electric cars, nine more are considering such a fee. Six states have also rejected such proposals.

 

The fees range from $50 for plug-in hybrids to $200 for fully electric cars. On average they add up to $23 more than other drivers pay.

 

The Sierra Club points out that electric-vehicle drivers already pay higher sales and excise taxes, because those taxes are based on a car's purchase price, which is often higher for electric cars.

 

Also, pointed out, drivers of gas and diesel vehicles get a pass on the public cost of emissions and the harmful environmental effects of the pollution they create.

 

Those costs fall disproportionately on lower-income communities, whose residents are less likely to afford the higher costs of electric cars.

 

The extra $23 on average that electric-car drivers pay has also unsurprisingly failed to close revenue gaps in state transportation funds, the Sierra Club points out.

 

Electric-car drivers pay taxes on electricity that internal-combustion drivers do not.

 

Concern was expressed that these fees on plug-in cars, combined with political attacks on electric car rebates funded in part by petroleum lobbyists, will slow adoption rates just as electric cars seem poised to take-off.

 

Regardless of who is right, raising revenue from electric-cars to replenish lost gas-tax revenue is a trend likely to continue. It is an easy sell for politicians in a country where gas taxes have long been known as the third-rail of politics—where most drivers resent paying them, and by extension anyone else who does not. 

 

Evarts, Evan. (2018). "17 states have passed extra fees on electric cars; is that fair?". Retrieved from https://www.greencarreports.com/news/1116289_17-states-have-passed-extra-fees-on-evs-is-that-fair. 

 

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