Texas considers EV tax, and EV owners are on board

[roamtheworld]

https://www.teslarati.com/texas-ev-tax/

The Texas State Legislature is considering levying a tax against EV owners to fund road upkeep and improvement, and EV owners are on board.

Electric vehicles are the choice for many consumers not only due to their environmental benefits but also due to their reduced cost of ownership. However, that reduced cost is now being challenged by a tax proposed by Texas State Legislature members that would either tax EV owners per mile driven or yearly with a flat fee. And perhaps most surprisingly, EV owners in Texas are on board with the idea.

As initially reported by the Austin American-Statesman, the bill currently being proposed in the Texas State Legislature would impose either a $200 flat tax or an undisclosed per-mile-driven tax. However, much of the bill is still up for deliberation.

While the tax initially sounds like an attack on EV ownership, Texas EV owners actually see it as a rebalancing of the responsibility to take care of the roads they drive on. As pointed out by a Texas Electric Transportation Resources Alliance representative, gas vehicle owners already pay their fair share for road repair via gas taxes collected at the pump. EV owners would be paying for the same benefits via this tax.

According to an internal poll of the EV owners, the vast majority favored paying their fair share, despite the increased cost of ownership. And while some had their preference between the two tax systems proposed, many still anticipated their EVs would save them significant amounts of money yearly due to the meager cost of charging.

While a tax such as the one explored in Texas would be somewhat of a first here in the United States, it is far from a first globally, where EVs have been taxed consistently. In many European countries, for instance, despite the incentivization of the government, EVs are often taxed to allow the state to continue to maintain roads outside of a fuel tax income system.

It’s unclear if this European-style tax system will come to the U.S., though with fuel tax income likely to decrease in the coming years, governments worldwide may have to get creative to continue to fund road projects and repair. And while the new cost may be annoying in the short term, hopefully, it can remain low enough that EVs remain the cheaper option compared to their gas counterparts.

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[21st Century Pony]

We've had something like this in Virginia for a couple of years. It's based on an EV "flat tax" that doesn't apply to ICE cars. It's so relatively small that I don't consider it an unfair burden.

EV owners must pay an annual highway fee of $116.49 in addition to standard vehicle registration fees. Beginning July 1, 2022, EV drivers may choose to enroll in a mileage-based fee program in lieu of highway use fee. (Reference Virginia Code 46.2-770 through 46.2-773)

 

[21st Century Pony]

...and here in my temporary Winter shelter in Louisville Kentucky:

Electric Vehicle (EV) Fee


In addition to standard vehicle registration fees, EV owners must pay an annual fee of $120 while hybrid electric vehicle and electric motorcycle owners must pay an annual fee of $60.

(Reference Kentucky Revised Statutes 138.32)

 

[ericNdfw]

This is basically the same BS they tried to do during the last session with SB1728.

I’m happy to pay an increased fee to offset the lack of gasoline taxes I pay but a $200 flat fee is ridiculous for most drivers.

I would have to drive a 25MPG car 25,000 miles to have paid $200 in state gasoline taxes.
Unless the bill also plans to double or triple the gasoline tax, then the fees imposed are beyond unreasonable.

 

[ericNdfw]

Original article is behind a paywall but searching the TX Leg' site, I think this is the bill in question: https://capitol.texas.gov/tlodocs/88R/billtext/html/HB00820I.htm

 

[Blue highway]

This is basically the same BS they tried to do during the last session with SB1728.

I’m happy to pay an increased fee to offset the lack of gasoline taxes I pay but a $200 flat fee is ridiculous for most drivers.

I would have to drive a 25MPG car 25,000 miles to have paid $200 in state gasoline taxes.
Unless the bill also plans to double or triple the gasoline tax, then the fees imposed are beyond unreasonable.

I wonder if they are baselining costs based on driving a bro-dozer that gets 12 MPG?

More likely, it's a "new" tax and the government sees this as an opportunity to set the tax bar higher.

 

[roamtheworld]

This is basically the same BS they tried to do during the last session with SB1728.

I’m happy to pay an increased fee to offset the lack of gasoline taxes I pay but a $200 flat fee is ridiculous for most drivers.

I would have to drive a 25MPG car 25,000 miles to have paid $200 in state gasoline taxes.
Unless the bill also plans to double or triple the gasoline tax, then the fees imposed are beyond unreasonable.

I for one am not opposed to a small annual fee to cover road maintenance but $200 seems high based on the taxes paid by gas taxes and average miles driven as you point out.

Maybe $50-$100 would be fair.

 

[dtbaker61]

https://www.teslarati.com/texas-ev-tax/

The Texas State Legislature is considering levying a tax against EV owners to fund road upkeep and improvement, and EV owners are on board. ...

As initially reported by the Austin American-Statesman, the bill currently being proposed in the Texas State Legislature would impose either a $200 flat tax or an undisclosed per-mile-driven tax.

I am in favor of paying fair share of tax for Roads, but not in favor of a flat fee. I would rather see annual Registration fees be set for ALL vehicles, regardless of fuel based on a formula determined by: actual miles driven * vehicle weight * MilRate = fee. This takes Politics completely out of the picture, and is 'fair', and would enable collection of taxes required to maintain roads.

- first year fee upon purchase (new or used) could use 'average annual miles', maybe 20k ?​

- thereafter, annual Registration fee determined by actual miles recorded by licensed inspection stations during annual safety/emissions inspections required for Registration.​

​

Switching to a variable fee, regardless of fuel, based on weight and actual miles would accomplish several things:

- enable States to collect needed funds for roads and bridges by adjusting mil rate as needed and Legislated State by State.​

- inspire consumers to buy smaller (lighter) vehicles that damage roads less, and consume less fuel by being rewarded for fewer miles driven​

- enable Insurance companies to offer lower cost Policies if fewer miles are driven​

- provide new jobs/licensure fees to certify inspection stations in places that do not have annual inspections... (such as rural counties in New Mexico that do not have even rudimentary safety or emissions checks). This might provide a small revenue stream for Service stations which are now depending on gasoline/diesel sales, and need to transition to include Services (like charge stations) for EVs.​

- enable elimination of the State portion of Gas taxes to reduce cost of ownership for existing ICE vehicles as they 'age out' of use.​

The net of this is that I would expect an EV to pay MORE than an ICE vehicle annually based on same miles driven since they are heavier than the 'average' ICE, and thus damage the roads more.

This would in turn result eventually in Manufacturers responding to Consumer requests for smaller LIGHTER vehicles, rather than bigger heavier ones. In the case of EVs, the most obvious consideration would be getting the appropriate capacity Battery. i.e. SR 68 kWhr battery weighs x, which cost y initially, and z annually.... and a EX 98 kWhr Battery than weighs a, cost b initially, and c annually..... would factor into people's consideration of 'how so I plan to use this car on a daily basis?' Do I plan to drive <50 miles a day *most* days, or do I drive >100 miles a day? Do I NEED 300 mile battery, or will 200 miles work?

 

[roamtheworld]

I am in favor of paying fair share of tax for Roads, but not in favor of a flat fee. I would rather see annual Registration fees be set for ALL vehicles, regardless of fuel based on a formula determined by: actual miles driven * vehicle weight * MilRate = fee. This takes Politics completely out of the picture, and is 'fair', and would enable collection of taxes required to maintain roads.

- first year fee upon purchase (new or used) could use 'average annual miles', maybe 20k ?​

- thereafter, annual Registration fee determined by actual miles recorded by licensed inspection stations during annual safety/emissions inspections required for Registration.​

​

Switching to a variable fee, regardless of fuel, based on weight and actual miles would accomplish several things:

- enable States to collect needed funds for roads and bridges by adjusting mil rate as needed and Legislated State by State.​

- inspire consumers to buy smaller (lighter) vehicles that damage roads less, and consume less fuel by being rewarded for fewer miles driven​

- enable Insurance companies to offer lower cost Policies if fewer miles are driven​

- provide new jobs/licensure fees to certify inspection stations in places that do not have annual inspections... (such as rural counties in New Mexico that do not have even rudimentary safety or emissions checks). This might provide a small revenue stream for Service stations which are now depending on gasoline/diesel sales, and need to transition to include Services (like charge stations) for EVs.​

- enable elimination of the State portion of Gas taxes to reduce cost of ownership for existing ICE vehicles as they 'age out' of use.​

The net of this is that I would expect an EV to pay MORE than an ICE vehicle annually based on same miles driven since they are heavier than the 'average' ICE, and thus damage the roads more.

This would in turn result eventually in Manufacturers responding to Consumer requests for smaller LIGHTER vehicles, rather than bigger heavier ones. In the case of EVs, the most obvious consideration would be getting the appropriate capacity Battery. i.e. SR 68 kWhr battery weighs x, which cost y initially, and z annually.... and a EX 98 kWhr Battery than weighs a, cost b initially, and c annually..... would factor into people's consideration of 'how so I plan to use this car on a daily basis?' Do I plan to drive <50 miles a day *most* days, or do I drive >100 miles a day? Do I NEED 300 mile battery, or will 200 miles work?

So much logic in this so I'll just label it all CRAZY talk.

Many states do have inspections so implementing something like this is possible but you have examples where inspections are not in place so the state and local governments would have to create a process and hire teams of government employees to monitor and collect. Weight decisions, what's the normal number of miles per year, are all things that have to be decided and I don't trust that these would be nonbiased. Just look at the IRA plan and the issues with classifications that look random or arbitrary.

 

[ericNdfw]

I agree on all counts, @dtbaker61 however, lawmakers never seem to take logic into account.

If you haven't seen it, A&M did a study on this topic way back in 2010 and concluded:

... most Texans are not supportive of mileage fees and that the public is unclear about how transportation funding works in Texas. It appears that concerns about privacy, administration, and enforcement will be difficult to overcome. The researchers’ primary recommendation to help alleviate public concerns was to demonstrate the logic and sustainability of mileage fees through an electric vehicle implementation. The research confirmed a consensus that applying a mileage fee to vehicles like these, which do not pay fuel taxes, makes the most sense for near term implementation.

 

[dtbaker61]

I agree on all counts, @dtbaker61 however, lawmakers never seem to take logic into account.

If you haven't seen it, A&M did a study on this topic way back in 2010 and concluded:

I wrote up this Plan back in 2003, and sat down with my State Rep to talk it thru, and his response was 'Thats a great plan Dan, but would be Political Death for any Legislator to carry that Bill'.

That was before there were EVs, I was proposing that move when there were ONLY ICE vehicles on the road. During the several swings in gas prices, that resulted in swings of Consumer demand for bigger and smaller vehicles, or changed ridership of mass transit and bikes.

Now, we are getting enough 'alternative fuel' vehicles on the road that the traditional Gas Tax will not work much longer.... I think its finally time to knock down that house of cards and start over.

 

[jhalkias]

https://www.teslarati.com/texas-ev-tax/

The Texas State Legislature is considering levying a tax against EV owners to fund road upkeep and improvement, and EV owners are on board.

Electric vehicles are the choice for many consumers not only due to their environmental benefits but also due to their reduced cost of ownership. However, that reduced cost is now being challenged by a tax proposed by Texas State Legislature members that would either tax EV owners per mile driven or yearly with a flat fee. And perhaps most surprisingly, EV owners in Texas are on board with the idea.

As initially reported by the Austin American-Statesman, the bill currently being proposed in the Texas State Legislature would impose either a $200 flat tax or an undisclosed per-mile-driven tax. However, much of the bill is still up for deliberation.

While the tax initially sounds like an attack on EV ownership, Texas EV owners actually see it as a rebalancing of the responsibility to take care of the roads they drive on. As pointed out by a Texas Electric Transportation Resources Alliance representative, gas vehicle owners already pay their fair share for road repair via gas taxes collected at the pump. EV owners would be paying for the same benefits via this tax.

According to an internal poll of the EV owners, the vast majority favored paying their fair share, despite the increased cost of ownership. And while some had their preference between the two tax systems proposed, many still anticipated their EVs would save them significant amounts of money yearly due to the meager cost of charging.

While a tax such as the one explored in Texas would be somewhat of a first here in the United States, it is far from a first globally, where EVs have been taxed consistently. In many European countries, for instance, despite the incentivization of the government, EVs are often taxed to allow the state to continue to maintain roads outside of a fuel tax income system.

It’s unclear if this European-style tax system will come to the U.S., though with fuel tax income likely to decrease in the coming years, governments worldwide may have to get creative to continue to fund road projects and repair. And while the new cost may be annoying in the short term, hopefully, it can remain low enough that EVs remain the cheaper option compared to their gas counterparts.

Any EV with a plug in Ohio pays $200 more to register, and Hybrids without a plug pay $100 more. So not a first for Texas. If you want to make it fair that way, eliminate the gas tax on personal vehicles and charge everyone the same at registration. It is really unfair to PHEV's that still use gas, or EV's that drive limited miles (like my wife that works from home).

Another more fair approach would be to base it on mileage.

 

[dtbaker61]

So much logic in this so I'll just label it all CRAZY talk.

yeah, I've been accused of that before...

Many states do have inspections so implementing something like this is possible but you have examples where inspections are not in place so the state and local governments would have to create a process and hire teams of government employees to monitor and collect.

...that's called 'economic development' in creation of new jobs. That's actually a Positive angle for most Politicians, even if it bloats Government a bit. I'm trying to think of ways small town gas/Service stations can transition revenue streams from pumping Gas to selling electricity and related services needed to keep us rolling and roads maintained.

 

[dtbaker61]

Another more fair approach would be to base it on mileage.

exactly....
base EVERY vehicle's fee on weight and actual miles driven annually.
totally fair

 

[ericNdfw]

One of my prior posts was deleted because I violated the "no politics" rules here. My apologies for that, I didn't mean to break a rule or offend anyone.

Please let me re-state my point in what I hope is non-political phrasing—which is somewhat challenging given that we are discussing a fairly contentious piece of legislation:

It is my opinion that certain bills get introduced as a way to pander to voters or because those that might oppose them are in the minority so there is little risk of issues at the polls.

Admins: If this post also violates the rules, feel free to delete it too, but I'd like to know how to discuss this kind of topic within the rules. (Some sites offer political forums to move such discussions to, but I don't see one here)

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