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Extra Taxes For Hybrid And Electric Vehicles

Gas vs HybridThe move from gas guzzlers to energy efficient vehicles is a definite boon for the environment. Hybrid and electric vehicles lessen carbon emissions, reduce climate change, improve air quality and lower petroleum dependence, both foreign and domestic.  But declining gasoline sales means that revenues from gas taxes are shrinking, and those funds are necessary to pay for highway improvements and repairs. To make up for the deficits in their coffers some states are proposing a tax on hybrid and electric vehicles, a proposal that has environmentalists crying foul.  After all, why penalize people who are helping to save the environment and reduce foreign oil dependency? Isn’t that tantamount to taxing people who don’t smoke to make up for lost cigarette taxes?

Consumer Reports put the question of taxing the vehicles to their readers on their facebook page. They asked, “Should electric cars be taxed to ensure their drivers pay their fair share to maintain roads? Or would taxing electric cars defeat the purpose of efforts to develop electric cars to save gas, clean the air, and reduce dependence on imported oil?”

More than 300 readers weighed in on the question, many of whom thought the idea of taxing drivers for burning less gas was supremely unfair. But many people agreed that since hybrid and electric car owners don’t pay their fair share of taxes for road upkeep, they are obligated to contribute via a special tax.  After all, electric vehicle buyers receive a federal tax credit in the amount of $7,500, so perhaps they shouldn’t complain about paying an additional amount to cover lost gasoline tax revenues. But the majority response of responders was against taxing vehicle owners of hybrids and electric cars.

Regardless of public opinion, states are already taking measures to tax environmentally friendly vehicles. In March, the Virginia legislature passed a bill enacting a $64 yearly fee on owners of hybrid and electric vehicles.  North Carolina, Massachusetts, Texas, Arizona, and New Jersey are thinking about enacting similar legislation.

A CNN article quotes Jay Friedland, legislative director of Plug-In America: “EV drivers want to pay their fair share. We want the roads to be supported, but we're still in a phase of early adoption and there's a greater public good."

What he means by ‘the greater good’ is that his organization wants electric vehicles to have a chance to gain wider sales in the U.S. before owners are penalized with an extra tax.  After all, electric vehicle sales account for only 1% of total car sales in the U.S.  To allow them to gain a greater percentage of the market, they want them to be as economically friendly to consumers as they are environmentally friendly. They believe that a flat road tax is the best way to tax all vehicle drivers fairly, rather than a gasoline tax.  The electric vehicle advocacy group also thinks vehicles should be taxed on miles traveled and weight, such as the tax that’s being proposed in Washington State.  A similar bill is being considered in New Jersey, where all drivers would pay 0.00839 cents for every mile they drive. The average driver covers about 12,000 miles annually, which amounts to a tax of roughly $100.

Until a method of taxing all drivers fairly and equally is decided, no doubt state legislators and advocates of electric hybrid vehicles will continue to squabble.