Anyone know if the $250 EV penalty made it into the final version of the BB bill?

[dbsb3233]

Regardless of the EV road tax calculus, the Federal gas tax is collected at the point of sale by the States rather than the Feds. The States pay the Fed gas tax to the US Government. There is no reason legislation could not be written for the States to collect the Federal EV road tax just as they do for the Federal gas tax. I'm not sure why this is such a difficult construct. The States know which of its citizens own EV based on the State's registration database.

States don't collect the federal gas tax. It's remitted directly by fuel sellers to the IRS.

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[Glen Boise]

I thought of that too. Have the states do it (for a 3% cut or something) and remit that to the feds. But while many states have EVs registration fees now (and the process to determine EV vs ICE), I don't think all do. And all of them may not choose to participate anyway. Then you get into the unfairness of 40 states collecting that tax and 10 not. It's gotta be all-or-nothing for a federal tax/fee.

Frankly, it may just be time to end the federal gas tax (and any thought of federal EV fee counterpart) and let the states handle their own highway funding. That's all the feds do anyway -- pick and choose what state projects to redistribute that money back to. It's effectively money-laundering, and ceding control to the feds. States have to go begging to the feds hat-in-hand to get their OWN taxpayers' money back.

The problem with ending Federal involvement is that we would lose a national system of highways. Think of all those Interstates crossing thinly populated Western states like Wyoming. States that could not raise enough money in taxes to maintain their interstates. Do you really want to go from paved highways to gravel at state lines?
Everything in the Federal Transportation Acts funds state and local projects by formulas set in the Act. Each state gets back at least 80% of the funds they pay in. The other 20% goes to administration and subsidizing the smaller, poorer states like Wyoming.
As for collecting Federal EV taxes, all it would be necessary is to mandate it in the Federal Transportation Act. Include a service fee as a sweetener and a "hammer" of cutting off aid. Many of the states without EV fees will use the opportunity to add them. They all ready have your vehicle ID which allows querying the manufacturers on the type of propulsion provided.

 

[Mach1E]

That loops right back to what I said at the start: they'd need access to state vehicle registrations, which they don't have. Has to be at the state end (the official authority), not the taxpayer claiming a negative (just saying he's not paying them anymore). Yes, taxpayers may come up with a bill of sale, but those are easily faked for private sales. Can even just write one on the back of a napkin. They're not official unless accepted by the state to transfer vehicle registration, who confirm the new owner (or that it's life ended as salvage). That's what the whole vehicle registration process exists for.

The "some people would still pay it even if many cheat" is not a viable argument in favor of it IMO. Just the opposite. Lack of access to state vehicle registrations would likely make cheating widespread for this one, not just another "a few% slipping through the cracks".

It's all needless anyway. States can fund their own highways without laundering taxpayer money through the feds (then having to go begging to get it back).

They don’t need access to state registrations. They don’t need access to our medical records when we get deductions for medical expenses.

In the audit, it’s up to the individual to show what cars they have registered.

Either way, as far as our tax code goes and proving who does what, this seems simple in comparison to what’s already out there.

 

[Mach1E]

States don't collect the federal gas tax. It's remitted directly by fuel sellers to the IRS.

Just another reason why my suggestion of collecting it when you do your federal income tax return would be a simple method: it goes to the IRS as well.

But again, not arguing for the tax, just saying there was an obvious simple fix that I am GLAD they ignored.

 

[dbsb3233]

They don’t need access to state registrations. They don’t need access to our medical records when we get deductions for medical expenses.

In the audit, it’s up to the individual to show what cars they have registered.

Either way, as far as our tax code goes and proving who does what, this seems simple in comparison to what’s already out there.

Well let's put it this way... if they don't want massive under-reporting and unfairness, they need access to state vehicle registration data.

But we agree that we're happy that they're not even trying to going there, so it's all moot.

 

[RickMachE]

The reality is that a significant number of states pull more money from the federal government than they send. Last I read it was around 30 that get more than they send. Since Wyoming was mentioned, they are in the top 10 of the most dependent list.

Lots of people say "let the states handle everything, without realizing that many states lack the population to pay for it (and are red states), and wouldn't invest in their infrastructure without federal funds.

That rolls into everything, i.e. education, roads, you name it. So, if we left say Alaska to their own devices, you'd have a disaster in a very short period of time.

 

[Mach1E]

The reality is that a significant number of states pull more money from the federal government than they send. Last I read it was around 30 that get more than they send. Since Wyoming was mentioned, they are in the top 10 of the most dependent list.

Lots of people say "let the states handle everything, without realizing that many states lack the population to pay for it (and are red states), and wouldn't invest in their infrastructure without federal funds.

That rolls into everything, i.e. education, roads, you name it. So, if we left say Alaska to their own devices, you'd have a disaster in a very short period of time.

Good points. The ratio of population to length of roads definitely isn’t evenly distributed.

 

[dbsb3233]

Good points. The ratio of population to length of roads definitely isn’t evenly distributed.

There's some of that. But it's not just the length of highways that's the pertinent measure, it's the $$ they cost. A mile of I-25 in the middle of nowhere in WY is a whole lot cheaper to build and maintain than a mile of I-95 in a crowded urban city in the Northeast corridor. The urban projects are wildly more expensive per-mile than the rural ones.

But yes, states like WY and AK are on the extreme end due to such long distances with relatively few people (taxpayers). They have very few super-expensive urban miles, but lots and lots of cheaper rural miles. High-density states are just the opposite.

 

[ChasingCoral]

There is no reason legislation could not be written for the States to collect the Federal EV road tax just as they do for the Federal gas tax.

Actually, there are good reasons why this wouldn't work or would at least be very complicated.

Requiring states to collect Federal taxes poses a financial burden on the states to implement the system. Such financial burdens have often been blocked by courts.
"although Congress may incentivize states to adopt a particular policy in order to obtain specific federal funds, it may not coerce state participation. Congress may not, for example, tie an existing funding source on which a state has come to rely on compliance with a new kind of requirement."
https://www.congress.gov/crs-product/R46827

The other issue is that many states are already wrestling with how to implement their own EV taxes for fair use of roadways (unlike the punitive tax burden posted by the BBB). Privacy advocates have pushed back hard on mileage reporting and flat fees have been identified as placing too large a burden on low income drivers and those who don't drive as much.

 

[SonicBlue]

This discussion is interesting… but it’s all kind of academic at this point now that the DOGE team is repossessing and melting down all EVs. Nobody has arrived so far to collect my MME. I’m hoping that the mustang branding may provide sufficient camouflage?! I turned my fake engine noise back on as an added precaution.

 

[superdave80]

Privacy advocates have pushed back hard on mileage reporting

I'm still trying to figure out what the privacy issue is. If they are talking about tracking devices (a bad idea all-around), I get it. But I don't know why reporting your odometer reading once a year would be an issue.

 

[dbsb3233]

I'm still trying to figure out what the privacy issue is. If they are talking about tracking devices (a bad idea all-around), I get it. But I don't know why reporting your odometer reading once a year would be an issue.

GSP tracking is commonly what's talked about for mileage, yes.

Individually reporting of your mileage each year raises some of the "too easy to cheat" loopholes mentioned above. Not that it can't be done, but seems kinda ripe for under-reporting to me. Some states may try it, but I don't think it would work for the feds (again, same issues mentioned above).

 

[nvabill]

The "distributors, manufacturers, wholesalers, and importers" collect the actual cash from the buyer at the pump (point of sale) located at the gas station, all which transactions are regulated by the State. So, the mechanism to collect the cash for the Federal gas tax is left up to the State to regulate (i.e. the accounting for the number of gallons bought by motorists occurs at the gas pump). It's not a difficult step for, once the State determines how to collect its State EV road tax, the State to collect the Fed's EV road tax at the same ratio the State taxes gasoline to the Federal gas tax. The State checks the accuracy of each gas pump.

 

[Wayne-001]

I suspect many states see the writing on the wall for fading federal gas tax revenue/funding coming their way and are starting to roll the federal gas tax into their EVs fees as well. EV drivers don't pay either the state or federal gas tax, but still use the roads just as much.

State gas tax revenues are fading too. Between ever-increasing MPG, the growth of hybrids/PHEVs/EVs, and lack of inflation adjustments, state and federal gas tax revenues have plummeted. But roads (like everything else) just keep getting more and more expensive to build and maintain.

I am fine with paying my share, but I am paying 3x my share.

 

[dbsb3233]

I am fine with paying my share, but I am paying 3x my share.

How do you figure 3x?

I figure roughly $200/yr for state+federal gas taxes in TX for the average ICE vehicle. Avg MPG is ~26 in the US, 13,500 avg miles driven. That's 519 gallons/yr x $0.384 (federal + TX state gas taxes) = $199.

Of course, those are averages, which is what they're stuck with when using an annual registration fee. Some people drive more miles and come out ahead, some less and behind. Same for avg MPG.

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