Politics as Usual: Washington State's $100 EV Tax Doesn't Make Sense
When I wrote this, Congress was still debating a deal only hours before reaching the fiscal cliff, proving that political posturing is more important than actual results in the nation's capital. But that’s true not only in Washington, D.C.—they’re acting just as dumb in Washington State, where beginning in February battery electric car owners will pay an annual $100 fee in lieu of gasoline taxes.
One Hand Giveth, the Other Takes it Away
Why is it dumb? Well, Washington also exempts battery electrics from the 6.5 percent state sales tax (and exempts charging station parts and labor), so isn’t the state incentivizing electrics with one hand and penalizing them on the other? Maybe it would make more sense to have owners pay a fee based on the actual miles they drive, or simply have them pay a percentage of that sales tax.
Earlier this year, when it passed the legislature, State Senator Mary Margaret Haugen justified her bill this way: “We think the purchase of electric vehicles is great for the environment but we also need to maintain our roads, which is why we have the gas tax. Electric vehicles put just as much wear and tear on our roads as gas vehicles. This simply ensures that they contribute their fair share to the upkeep of our roads.”
EVs Should Pay, But Not Yet
I’m not saying this idea is totally without logic—electrics should pay for road improvements, and they’re not going to do it at the gas pump. But there’s so few of them on the road, even in EV-friendly states like Washington—that the amount collected from this will be negligible. It’s a bill for appearance sake. Also, by making it a flat fee it encourages EV owners to drive as much as they can, which adds to wear and tear on the roads.
Paul Scott, an EV activist and Plug In America co-founder who also sells Nissan LEAFs in Los Angeles, concurs. “It’s a bone thrown to the right wing to say ‘We are taxing the treehuggers, too.’ Plug-in proponents are in favor of taxing electric cars to support road building and maintenance, but not while we’re still trying to get economies of scale. Internal-combustion vehicles don’t come close to paying their way, so to complain that EVs should pay for roads is a bit disingenuous.”
Jay Friedland, Plug In America's legislative director, adds that it's even worse than that: "The tax affects less than 2,000 vehicles in Washington State and potentially costs more to administer than it brings in," he said. "It's very poor public policy when they have a sales tax exemption for EVs at the same time they do something like this road tax. If they were serious about revenue they would be taxing all alternative fuel vehicles, including hybrids, but clearly they wanted to just make a statement."
Oddly enough, the right seems to agree that this is window dressing. A Breitbart.com story on the tax is entitled, “Washington State Pushes Electric Cars, Then Taxes Owners.”
The state’s “Electric Drive WA” page touts, “With one of the cleanest electricity supplies of any state, Washington can significantly reduce its pollution and carbon footprints as more consumers adopt plug-in vehicles….Users of electric vehicles enjoy very significant savings in fuel costs. In Washington State the cost to drive 100 miles with an EV is about $1.50, compared to about $10 to $12 for a typical fuel-efficient gasoline car.” Fair enough, but now you have to factor in the $100 fee.
Washington does seem enthusiastic about EVs, though not as enthralled as California (which offers rebates of up to $2,500). The state partnered with AeroVironment to put fast chargers along its section of the I-5 corridor, making possible a west coast all-electric run.
Fee Could Change
Haugen’s office told me last February that the $100 fee would be automatically converted to a vehicle miles traveled (VMT) system if the state makes a similar change to the gas tax, which is currently at 37.5 cents per gallon. EV owners are fairly affluent, so a VMT-based tax probably won't convince many to stay home, but it's still a more logical approach.
Automakers, especially General Motors, have been vocal in opposing taxes on electric cars, making the same point as Scott—it’s too early in the evolution of the plug-in vehicle to start introducing fees of this kind. But other states are weighing the same political considerations—Oregon and Kansas have also considered imposing similar fees on EVs.
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