States across the country are continuing to explore ways of raising revenue for transportation purposes through fees imposed on owners of electric and hybrid vehicles. At least 33 states currently have special registration fees for plug-in electric vehicles, with most also assessing fees on plug-in hybrid vehicles. These fees can range from $50 annually in some states to $225 yearly in others. Some states have structured their registration fees to increase over time by linking them to factors like the consumer price index.
New Jersey is one of the latest states to implement a new annual registration tax on zero-tailpipe-emission vehicles. Governor Phil Murphy signed a bill that includes a flat $250 annual fee on electric vehicle registrations, increasing by $10 each July until 2028 when the fee will reach $290. The state also imposed a yearly fuel tax increase starting July 1, with rates for gas and diesel both set to rise through 2028.
Missouri is considering a bill that would establish a road-use fee for electric vehicles and plug-in electric hybrid vehicles. The proposed fee would be collected at the time of initial registration, with rates set at 4% of the list price for new electric vehicles and 4% of the Kelly Blue Book value for used electric vehicles. New plug-in electric hybrid vehicles would be charged a 2% fee. The revenue raised from these fees would go into the state’s road fund.
Pennsylvania is also looking to increase revenue from electric vehicle owners by replacing the alternative-fuel tax with a flat fee. One bill under consideration would exempt owners of noncommercial electric vehicles up to 14,000 pounds from the tax and replace it with an annual fee of $290. Another bill proposes an annual fee starting at $125, increasing by $25 each year until reaching $225 in 2029. Both bills aim to address concerns about inconsistent or insufficient tax payments made by electric vehicle owners.
State lawmakers are grappling with finding the balance between raising necessary revenue for transportation funding while ensuring fees are fair and equitable for electric vehicle owners. Issues such as setting fee amounts, including plug-in hybrid vehicles, and adjusting fees based on inflation are being carefully considered in the legislative process. As the number of electric and hybrid vehicles continues to grow, states will likely continue to revisit and refine their fee structures to ensure sustainable transportation funding.
