EV drivers pay more taxes and fees than ICE drivers in 36 states: study

Electric car owners are freeloaders, avoiding the gasoline taxes that pay for the maintenance of America’s roads and highways—all while using that infrastructure as much as anyone else. That’s what some people think, but a new study suggests that’s not entirely true.

Atlas Public Policy, a policy and data research firm, analyzed the numbers and actually concluded the opposite. Between registration fees for EV buyers and taxes levied on charging stations, the company found, EV owners in a majority of U.S. states could end up paying more to the government annually than drivers of combustion-engine cars.

Get fully charged

The roads funding gap

EV drivers don’t pay the gas taxes that help fund infrastructure like roads and bridges. Research shows that EV-specific registration fees and taxation attempting to bridge this gap may have gone too far.

The company found that in 36 states, including Washington, DC, electric car drivers who charge their vehicles exclusively at public fast-charging stations pay an “EV penalty.” That means they have to pay more in various taxes and fees than an average petrol car driver pays in fuel taxes each year.

Utah has the highest fine: a whopping $368.76 per year. Georgia is No. 2 with $325.61. Kentucky is in third place, with $260.33. In total, 16 states have a fine of more than $150. Here are the top 10:

Stands EV penalty
Utah $368.76
Georgia $325.61
Kentucky $260.23
Tennessee $235.03
Alabama $234.77
Mississippi $222.40
West Virginia $209.26
Texas $201.71
Oklahoma $188.72
North Carolina $185.54

The lowest EV fine was found in Oregon. Even after a $90 registration fee, EV owners there pay $119.49 less annually in taxes and fees than drivers of gasoline cars.

In an effort to make up for lost gas tax revenue, many states are asking EV owners to pay additional annual registration fees. That ranges from $50 in Hawaii to $225 in Washington, according to Atlas Public Policy. The bigger problem, the company argues, is that charging is often subject to multiple overlapping, opaque taxes that unfairly drive up the cost of owning an EV. There are sometimes taxes per kilowatt hour on energy supplied, in addition to, for example, the regular, old sales taxes.

“Currently, there is no structure to prevent the overlap of these fees, so EV drivers may be subject to double, triple or quadruple taxation depending on which state they live in and where they charge,” the company said in his report. . “Meanwhile, gasoline drivers are only subject to the gasoline tax and are generally exempt from sales or other taxes.”

A word of caution: the typical EV owner doesn’t exclusively use fast-charging stations. A majority of them charge at home most of the time. Moe Khatib, the author of the study, told InsideEVs that drivers who charge at home are likely to pay fewer fees and taxes annually than drivers of gasoline cars in their state.

Still, the findings point to an equity problem. A growing portion of new EV buyers do not have the luxury of charging in a garage or driveway. So the way things are structured now essentially penalizes people for living in places where they have to park on the street. Public EV charging should appeal to the next wave of EV users.

And at a time when electric cars already cost more upfront than gasoline equivalents, the widespread “EV penalty” could give hesitant buyers another reason to stick with gas. According to market research firm Strategic Vision, 12% of American car owners say that registration costs for electric vehicles are a barrier to driving electric. And 34% cite total cost of ownership as a hurdle.

Atlas Public Policy says taxes and fees for EV owners need to be adjusted and made more transparent, especially as EV sales grow to new heights every year. That makes sense. If the EV movement really wants to go mainstream, people shouldn’t feel like they’re paying a premium to participate.

Contact the author: tim.levin@insideevs.com

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