Tax on gas and road funding

NC is starting to grapple with this issue, although no EV incentives yet, and it's unlikely the changes have anything to do with EV. The next budget proposal includes a ~20% reduction in the gas tax per gallon included at the pump, and an increase in the "highway usage tax" (sales tax) from 3% to 4%, if passed will be effective 1/1/16. So all potential Tesla buyers should finalize in 2015!

My prediction is a combination of higher registration fee plus odometer-based billing for private owners, and an advanced system using GPS tracking with time-and-location-based billing for commercial drivers, perhaps optionally available for private owners.

I expect multiple states to together quickly.

Ca. $100 surcharge. Talking about it right now.

Missouri has a $75 sticker required. Illinois has been talking about it for a while.

This kind of sh*t drives me nuts. Fossil fueled cars get so many free passes. Human health...free pass...no tax. Environmental degradation, bring it on...no fee, no tax. Now electric vehicles are getting one free pass and people decide to take notice. If these politicians and/or municipalities want to get rid of free passes, then do it, but all of them.

Also, add any taxes paid on electricity to gas/diesel as well, if we have to pay their taxes then they should have to pay ours.

End of rant/observance of reality.

A couple states (Georgia?) have already acted and imposed higher annual registration fees ($100) for EVs, and a lot more seem to be headed that way.

As long as it actually does represent paying a fair share rather than a bunch more than the typical car pay in tax, I don't have a problem with it.
Walter

Do you care that you are being double taxed? Paying all taxes and fees on for electricity and then being taxed/feed/surcharged again an equivalent amount to the taxes on gas? Does any part of the gas tax help maintain the electric grid?

Evbwcaer said:

Do you care that you are being double taxed? Paying all taxes and fees on for electricity and then being taxed/feed/surcharged again an equivalent amount to the taxes on gas? Does any part of the gas tax help maintain the electric grid?

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I get taxed on the electricity I use to pay for the electric grid - like everyone else who uses electricity, including the owners of those gas cars and the gas station pumping the gas. That doesn't mean I shouldn't also pay my fair part for the maintenance of the roads I use.

We live in a society that shares some rather expensive nice things, and the only way we can keep them is if everyone pays for them. I don't see how this is being "taxed double" here. The taxes on electricity cover the grid that supplies the electricity. The taxes on gasoline are supposed to cover the roads - which has never been a great system, but more or less worked when all vehicles used similar amounts of gas/diesel for a given weight.

Saghost said:

I get taxed on the electricity I use to pay for the electric grid - like everyone else who uses electricity, including the owners of those gas cars and the gas station pumping the gas. That doesn't mean I shouldn't also pay my fair part for the maintenance of the roads I use.

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Agree. I think it will come down to a "per-mile" fee as more and more alternative fuel vehicles hit the roads. Otherwise, there may be some sort of annual fee based on average mileage for non-gasoline cars.

mknox said:

Agree. I think it will come down to a "per-mile" fee as more and more alternative fuel vehicles hit the roads. Otherwise, there may be some sort of annual fee based on average mileage for non-gasoline cars.

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Yes, the current lump sums are a crappy band-aid. They very obviously suck or there wouldn't be a gas tax. Until such time that plug-ins become a more substantial part of the fleet, we'll not get per-mile road pricing.

Evbwcaer said:

This kind of sh*t drives me nuts. Fossil fueled cars get so many free passes. Human health...free pass...no tax. Environmental degradation, bring it on...no fee, no tax. Now electric vehicles are getting one free pass and people decide to take notice. If these politicians and/or municipalities want to get rid of free passes, then do it, but all of them.

Also, add any taxes paid on electricity to gas/diesel as well, if we have to pay their taxes then they should have to pay ours.

End of rant/observance of reality.

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Exactly! EVs make up <1% of all cars on the rode. Politicians/govt: "oh yeah, gotta tax that, EVs are getting a free ride"

Evbwcaer said:

This kind of sh*t drives me nuts. Fossil fueled cars get so many free passes. Human health...free pass...no tax. Environmental degradation, bring it on...no fee, no tax. Now electric vehicles are getting one free pass and people decide to take notice. If these politicians and/or municipalities want to get rid of free passes, then do it, but all of them.

Also, add any taxes paid on electricity to gas/diesel as well, if we have to pay their taxes then they should have to pay ours.

End of rant/observance of reality.

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Might depend on your taxes. We pay our 5.5% sales tax on electricity and that's about it (unless there's a bunch of completely hidden stuff).
Let's be conservative and say 0.5kWh/mi, then at 13c/kWh they're getting $0.003575/mi. Compare to 49.9c/gal fuel tax and a Prius driver might be paying around $0.01c/mi. So, yes, driving on electricity is definitely a break here.

Really, my problem isn't so much the fee, it's the fixed fee, which discourages low-mileage drivers from going electric and is inherently unfair.

ItsNotAboutTheMoney said:

Might depend on your taxes. We pay our 5.5% sales tax on electricity and that's about it (unless there's a bunch of completely hidden stuff).
Let's be conservative and say 0.5kWh/mi, then at 13c/kWh they're getting $0.003575/mi. Compare to 49.9c/gal fuel tax and a Prius driver might be paying around $0.01c/mi. So, yes, driving on electricity is definitely a break here.

Really, my problem isn't so much the fee, it's the fixed fee, which discourages low-mileage drivers from going electric and is inherently unfair.

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The politicians don't just see tax as a lump, they specifically go to other things, so you can't even compare an electricity tax (which probably is intended to fund the PUC) with the gas tax (which is intended to fund road development) in most cases. To us, a tax is a tax, and it takes our money, but politicians are a slimier bunch.

Eventually, I think the majority of us will end up with a weight x mileage tax that we have to pay on a regular (quarterly?) basis.

I agree with @ItsNotAboutTheMoney: a fixed fee isn't cost-linked, while a mileage-based fee would be. Most jurisdictions require periodic inspections, so it would be easy to track mileage and assess an per-mile tax (or, as FlasherZ suggests, a more complex formula including weight) at the time of the inspection and at the time of title transfer. (Road damage caused by a vehicle, we've been told on these boards, is proportional to the 4th power of a vehicle's weight. That tax could be very politically challenging to impose.)

The downside of this approach is that the home state gets all the revenue, while the current gas-tax approach spreads the money around roughly in proportion to where you drive. There are a lot of Florida plate cars here in Maine all summer long, and the gas they buy here helps pay for the roads they use here. In an ACLU-nightmare world the car reports how many miles it has driven to each state, which then collects its per-mile tax.

Robert.Boston said:

The downside of this approach is that the home state gets all the revenue, while the current gas-tax approach spreads the money around roughly in proportion to where you drive. There are a lot of Florida plate cars here in Maine all summer long, and the gas they buy here helps pay for the roads they use here. In an ACLU-nightmare world the car reports how many miles it has driven to each state, which then collects its per-mile tax.

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IFTA for passenger cars. Woo. </sarcasm>

Saghost said:

I get taxed on the electricity I use to pay for the electric grid - like everyone else who uses electricity, including the owners of those gas cars and the gas station pumping the gas. That doesn't mean I shouldn't also pay my fair part for the maintenance of the roads I use.

We live in a society that shares some rather expensive nice things, and the only way we can keep them is if everyone pays for them. I don't see how this is being "taxed double" here. The taxes on electricity cover the grid that supplies the electricity. The taxes on gasoline are supposed to cover the roads - which has never been a great system, but more or less worked when all vehicles used similar amounts of gas/diesel for a given weight.

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This IS being double taxed because you get taxed on the electricity that fuels your car and you, essentially, get taxed on the equivalent gas (that you did not use). Two taxes. A person driving a gas car pays only the equivalent gas tax. One tax.

Yes, we live in a society where we need to pay for things, totally agree, but the argument is that EV drivers should pay twice, is it not? Additionally, there is the whole buffet of costs that drivers of gas cars place on the same society without permission, without apology, without compensation, without any plan to change, and largely without any acknowledgement.

Read this link about living near a roadway and asthma.
Breathe Wheezy: Traffic Pollution Not Only Worsens Asthma, but May Cause It - Scientific American

"found that at least eight percent of the more than 300,000 cases of childhood asthma in Los Angeles County can be attributed to traffic-related pollution at homes within 250 feet of a busy roadway."

Now somebody who recently went to the gas station, not likely anyone here, show me on your receipt the line that says, "Childhod Asthma Abatement Fee." Once that fee is on there... charge me my road tax and I'll shut up.

Robert.Boston said:

I agree with @ItsNotAboutTheMoney: a fixed fee isn't cost-linked, while a mileage-based fee would be. Most jurisdictions require periodic inspections, so it would be easy to track mileage and assess an per-mile tax (or, as FlasherZ suggests, a more complex formula including weight) at the time of the inspection and at the time of title transfer. (Road damage caused by a vehicle, we've been told on these boards, is proportional to the 4th power of a vehicle's weight. That tax could be very politically challenging to impose.)

The downside of this approach is that the home state gets all the revenue, while the current gas-tax approach spreads the money around roughly in proportion to where you drive. There are a lot of Florida plate cars here in Maine all summer long, and the gas they buy here helps pay for the roads they use here. In an ACLU-nightmare world the car reports how many miles it has driven to each state, which then collects its per-mile tax.

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As I understand this subject, we pay two fuel taxes: One to the federal government and one to the state. The federal rate is constant across all the states, while each state's tax differs. In addition in California we pay sales tax on retail sales of diesel and gasoline. The Federal Highway Trust Fund has been running short for many years now. I am not sure about California, but I am pretty sure that our road taxes go into the pot along with everything else like sales and income taxes and the legislature budgets as they see fit.

I recall reading somewhere years ago that California receives about 84% of the federal gas tax money collected in California for its roads and highways, so the dollars are not returned to the states in direct proportion to highway usage.

The voters in many localities have passed "add-on" sales taxes to fund road construction, expansion and freeways. These measures typically add a half-percent to the statewide sales tax, and fortunately the BOE has the power to allocate these funds back to the cities and counties and not place them into the general fund.

I guess what I am saying is that taxing road usage by BEVs is not an easy task to undertake. No solution will be fair to all. I am hopeful that whatever comes down the pike in the ensuing years will be fairest to the most. But given the way politicians think, I suspect that we will wind up paying far more than our equitable share, especially as compared to ICE drivers.

And we haven't even begun to factor in those of us who charge our cars with PV cells thereby avoiding any capturing of electrical usage by a meter.

Evbwcaer said:

This IS being double taxed because you get taxed on the electricity that fuels your car and you, essentially, get taxed on the equivalent gas (that you did not use). Two taxes. A person driving a gas car pays only the equivalent gas tax. One tax.

Yes, we live in a society where we need to pay for things, totally agree, but the argument is that EV drivers should pay twice, is it not? Additionally, there is the whole buffet of costs that drivers of gas cars place on the same society without permission, without apology, without compensation, without any plan to change, and largely without any acknowledgement.

Read this link about living near a roadway and asthma.
Breathe Wheezy: Traffic Pollution Not Only Worsens Asthma, but May Cause It - Scientific American

"found that at least eight percent of the more than 300,000 cases of childhood asthma in Los Angeles County can be attributed to traffic-related pollution at homes within 250 feet of a busy roadway."

Now somebody who recently went to the gas station, not likely anyone here, show me on your receipt the line that says, "Childhod Asthma Abatement Fee." Once that fee is on there... charge me my road tax and I'll shut up.

Click to expand...

We're clearly failing to communicate here, and I don't understand just where the gap is...

I get electricity from a grid - I pay taxes to support that grid.

I drive on public roads - I pay taxes to support those roads.

The ICE driver drives on public roads - He pays taxes to support those roads.

The ICE driver probably has a house where he pays taxes on the electricity he uses there, but it's irrelevant - he doesn't need the electric grid to support his car, so why would he pay for it with his gas?

(Although, actually, it's folded into the price of his gas, to support the grid in providing power to pump the gas. Secret, hidden tax. Shh...)

I don't necessarily disagree about the pollution and its impacts, but the conditions are sufficiently variable and unpredictable that we can only handle them with statistical methods, and that makes it really hard to make fair assessments. Then there's the whole "what price do you put on life/health question...
Walter

NC already charges $100 per year for EVs.