States take steps to tap electric vehicles for road funds

Raising revenue for transportation purposes via owners of electric and hybrid vehicles is a continuing topic at statehouses.

There are at least 33 states that impose a special registration fee for plug-in electric vehicles, according to the National Conference of State Legislatures. Most of those states also assess a fee on plug-in hybrid vehicles.

Fees range from about $50 annually for plug-in personal electric vehicles in Colorado, Hawaii and South Dakota to $225 yearly for plug-in personal electric vehicles in Washington.

At least a half dozen states structure registration fees for electric vehicles and/or hybrid vehicles to grow over time by linking the fees to the consumer price index or another inflation-related metric.

New Jersey

A new addition to the list is the state of New Jersey. Gov. Phil Murphy has signed into law a bill to boost transportation revenue via a fuel tax increase and a new annual registration tax on zero-tailpipe-emission vehicles.

A flat $250 annual fee on electric vehicle registrations will begin being collected on July 1. The amount will increase by $10 each July until 2028. At that time, the annual fee will reach $290.

Also included in the new law is an annual fuel tax increase.

The state fuel rate now is set at 42.3 cents for gas and 49.3 cents for diesel.

Starting July 1, a yearly 1.9-cent-per-gallon fuel tax increase will be imposed through July 2028. At that time, the gas rate will be 51.8 cents and the diesel rate will be 58.8 cents.

Missouri

Still under consideration in the Missouri statehouse is a bill that would establish a road-use fee for electric vehicles and plug-in electric hybrid vehicles.

The House Transportation Accountability Committee voted to advance a bill to authorize the state to implement an electric vehicle road-use fee and a plug-in electric hybrid vehicle road-use fee. The fee would be collected only at the time of initial registration.

For new electric vehicles, the fee would be 4% of the list price. For used electric vehicles, the fee would be 4% of the vehicle’s Kelly Blue Book value.

New plug-in electric hybrid vehicles would be charged a 2% fee. Affected used vehicles would be charged 2% of the vehicle’s Kelly Blue Book value.

Revenue raised would go into the state’s road fund.

HB1921 awaits further House consideration.

This year’s pursuit follows a 2021 law for owners of alternative-fuel vehicles to contribute more for transportation funding.

The three-year-old law increased fees for decals by 20% annually for five years. It also increased the fee for electric and hybrid vehicles weighing in excess of 36,000 pounds by 10% annually over the same time period.

Pennsylvania

Electric vehicle owners in Pennsylvania could soon be paying into the state’s road fund. Two bills at the statehouse cover the issue.

One bill nearing passage, SB656, would replace the alternative-fuel tax collected on noncommercial electric vehicle owners with a flat fee.

The Keystone State now requires affected vehicle owners to file monthly statements with the Department of Revenue and to remit the alternative-fuel tax on how much electricity their vehicle uses.

Sen. Greg Rothman, R- Mechanicsburg, has said that most owners of electric vehicles do not pay the tax or are “inconsistent at doing so.” He has cited “the cumbersome process or simply being unaware.”

As introduced, his Senate bill would exempt owners of noncommercial electric vehicles up to 14,000 pounds from the tax and replace it with a flat annual fee of $290. The flat fee would be the highest in the nation for electric vehicle owners.

All hybrid vehicles and commercial electric vehicles were not included in the bill.

The House Appropriations Committee met recently to consider SB656. House Transportation Committee Chairman Ed Neilson, D-Philadelphia, voiced concerns late last year the bill would result in Pennsylvania having the highest electric vehicle fee in the country.

“290 is way too high,” Neilson said. “Additionally, the bill does not provide for plug-in hybrid vehicles. It does not provide for any automatic adjustment to the EV fee based on inflation.”

He voted in favor of the bill in committee to allow further discussion on the issue.

In the meantime, Neilson introduced his own bill to set an electric vehicle road user charge. Specifically, HB2184 would collect an annual fee starting at $125. The amount would increase by $25 yearly through 2029. At that time, the fee amount would be $225.

The lower fee amounts included in HB2184 were amended into SB656. Additionally, the House Appropriations Committee added a provision to collect fees from plug-in hybrid vehicles.

Affected vehicles would begin paying $31 in 2025. The fee amount would increase about $6 annually through 2029. At that time, the fee amount would be $56.

An annual inflation adjustment would take effect the following year.

Another change made to SB656 that is included in HB2184 calls for doing away with the alternative-fuel tax on electricity for residential charging of battery-powered vehicles.

SB656 next heads to the House floor. If approved there, it would move back to the Senate for final approval before advancing to the governor’s desk. HB2184 is in the House Transportation Committee. LL

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