States Boost Fees on Hybrid, EV Owners

By Staff Writer May 10, 2022 224

One growing trend is for states to apply a separate registration fee for certain hybrid or electric vehicles, according to the National Conference of State Legislatures (NCSL).

These fees come in addition to standard motor vehicle registration fees and proponents support the fees as a way of bringing equity among drivers by ensuring all drivers pay for using roadways.

NCSL reports many states face declining gas tax revenue—not only because of electric vehicles—forcing state policymakers to consider other ways to pay for the nation’s transportation infrastructure.

Ten states—Alabama, Arkansas, Hawaii, Illinois, Iowa, Kansas, North Dakota, Ohio, Washington and Wyoming—enacted laws in 2019 amending or adding new fees for plug-in electric and some plug-in hybrid vehicles, more than any previous year. As of November 2020, 28 states have laws requiring a special registration fee for plug-in electric vehicles. Of those, 14 states also assess a separate, slightly lower fee on plug-in hybrid vehicles, according to NCSL.

The fees range from $50 per year in Colorado, South Dakota and Hawaii to $225 for a plug-in electric vehicle in Washington. Alabama, Arkansas, Ohio and Wyoming all enacted bills in 2019, setting or increasing fees for electric vehicles to $200 annually. Oklahoma and South Dakota both enacted legislation in 2021 to impose new EV fees. South Dakota now imposes a flat $50 fee for all PEVs, while Oklahoma has tiered EV fees based on vehicle weight, with a $110 fee for EVs under 6,000 pounds. Idaho introduced legislation in April 2021, currently pending, that would increase the state’s EV registration fee from $140 to $300 annually. If enacted, it would also create an alternative 2.5 cents per mile fee system, which drivers can pay in lieu of the $300 fee.

NCSL states revenue from these additional fees is most often directed toward a state transportation fund. However, a few states also allocate some fee revenue to support electric vehicle infrastructure. For example, Alabama allocates $50 of its $200 fee for new electric vehicle infrastructure and Washington added an additional $75 fee in 2019 to support charging stations. Colorado dedicates $20 of the $50 EV fee to the Electric Vehicle Grand Fund to support charging stations.

Fourteen states also impose a fee for plug-in hybrid vehicles that operate on a combination of electricity and gasoline. The fee for plug-in hybrid vehicles is $32 in Iowa but will increase to $48.75 in 2021, and $100 in Alabama, Arkansas, Ohio and West Virginia. South Carolina is the only state without an annual fee, and instead requires a payment of $120 for all-electric cars and $60 for plug-in hybrid vehicles, every two years.

At least five states—California, Indiana, Michigan, Mississippi and Utah—structure the additional registration fees to grow over time by tying the fees to the consumer price index or another inflation-related metric. These states are striving to avoid the declining purchasing power of gas taxes due to years of fixed-rate structures.

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Last modified on Monday, 16 May 2022 10:06