Electric Vehicle Owners To Pay Additional Fee For Not Paying The Gas Tax

32 states in the United States of America will charge electric vehicle owners an additional fee via various means. The motive behind this rule is to ensure everyone contributes to funds that are used for road maintenance. Previously, the states collected such funds via the gas tax. However, since EV owners will not be using gas for their vehicles, they must fund the maintenance of the roads they drive on by other means.

In Texas, a bill, which authorizes the government to collect an annual EV tax of $200, has been passed by both houses. At present, Senate Bill 505 awaits the signature of Gov. Greg Abbott. Once that happens, the bill will come into effect from September 2023.

In addition to the annual tax, electric vehicle owners will also have to pay out $400 the first time they register with the Department of Motor Vehicles. As per Murfreesboro car accident lawyers, the amount collected through such means are going to offset the lack of gas tax coming in from the citizens in the state of Texas. As per the legislation, the collected funds will be deposited with the state highway fund, and used for maintaining the roads and highways within the state.

However, an intriguing aspect of taxes on EVs is that the newer and more diverse vehicles being launched into the market are more efficient as machines. Thus, they require lesser fuel, and hence the tax they pay would be lesser too. This is a problem because the people in the top tier of the socio-economic strata will likely own the latest efficient vehicles. Thus, they would pay lesser taxes and drive on roads funded by people from lower tiers of the socio-economic strata. As a result, the government has a larger challenge of understanding how to tax people for road maintenance fairly and equitably.

According to Douglas Shinkle, the transportation program director of the National Conference of State Legislatures (NCSL), a flat fee for all users makes sense “from an equity perspective.”

Across states, some form of the additional fee charged for EV owners ranges from about $50 in Colorado, South Dakota, and Hawaii to about $225 for some EV owners in Washington. However, not everyone agrees with such taxation bills. For instance, Environment Texas deemed the $200 toll for EV owners a “punitive fee.” According to Consumer Reports research, only $71 per vehicle is required to offset the charges of the Gas Tax, whereas the state charges at least $200.

Certain people who are against the bill also say that the EV and Gas Tax fees aren’t commensurate. For instance, if a person fills their vehicle with a 15-gallon tank about 40 times a year, they still pay only $120 in excise taxes. The EV fee is $80 more than that number.

Besides this, people who work for environmental causes also believe that with such heavy tolls, EVs will become less affordable to people from lower economic strata, which would, in turn, harm the environment. People have also countered the one-size-fits-all idea because different people use their vehicles differently. Thus paying the same amount of tax would be a concern, especially for citizens who are not well-off and do not use their vehicles as luxuries. However, advocates of the bill have pointed out that the incentives provided by the state to electric vehicle owners do offset such additional fees.

Overall, the laws surrounding EVs need more nuance. The different layers comprising the environmental effects, affordability, usage, and more must be considered to identify the challenges, address them, and create a fee structure that’s straightforward but fair to all citizens.


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