States Consider Taxing Electric Cars to Make Up For Lost Gas Tax Revenue

· · 10 years ago

Politicians in at least three states are reportedly considering the creation of plug-in car taxes. The new fees would be intended to fill the budgetary void created by falling gas tax revenue as drivers gradually abandon oil for electric drive. Legislation about to be introduced in Oregon, Washington, and Texas would establish Vehicle Miles Traveled taxes for EVs, which in most cases would be tracked by a car's GPS system and sent to a database that would calculate how far each driver travels and how much they owe.

Different states have always had different methods for imposing road taxes on drivers. Some include them as an up-front fee when a vehicle is registered, using the value, weight, or class of vehicle to determine how much to charge. In the case of Oregon—which completed a study on the efficacy of using a Vehicle Miles Traveled (VMT) tax several years ago—the vast majority of road maintenance and construction funds are collected from a 30 cents per gallon gasoline tax.

As a result, Oregon is one of many states that has been toying with the idea of switching to a VMT tax, which would ensure that drivers of hybrid, electric, and fuel-efficient gas vehicles pay their fair share for using the roads. Though the initial Oregon bill, HB 2328, applies only to plug-ins, VMT-like taxes are likely to one day become a preferred method for collecting road fees. That is, if governments can convince citizens that GPS monitoring of their driving habits doesn't infringe too far upon their privacy.

Too Much Privacy Infringement, Not Enough Cars

In its current form, HB 2328 includes a provision that would create an alternative non-GPS method for collecting driving data in an effort to provide some peace of mind to privacy-conscious citizens. Studies suggest that while most drivers wouldn't have a problem with paying for road use on a per-mile basis, few want Big Brother poking around in their navigation systems. But how to implement such a law in a fair and accurate way without violating driver privacy is a question that remains unresolved.

With so few electric vehicles on the road so far, many also might also question whether the cost and headaches associated with introducing a plug-in tax are really worth it. Oregon's legislation wouldn't kick in until 2014, but even then, the loss in gas tax revenue from electric vehicles alone is likely to be minimal. Though using EVs as a trial program for a larger VMT structure may make sense given their limited numbers and typically advanced navigation consoles, to many electric-drive advocates, the plan would single out a technology that the government is attempting to encourage—and possibly raise red flags for some potential buyers.

Would you be less likely to purchase a plug-in if you knew that it meant the government would be able to access information about your driving habits—even if that information were limited to how much driving you had done in and outside of your state's borders and when?

If you'd like to read more about the proposed Oregon bill, check it out here.

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