EV registration fees penalizing EV owners?

[danaleighton]

[edit] Meant for the title to be ...penalizing EV owners in some states -- but can't change the title or delete and redo.

So... I got my registration notice recently after buying my Model Y. It includes a $200 fee for all electric. Hybrids get $100. This seemed excessive, but I thought to myself, "well, maybe I would pay that much in gas tax?"

Did a little research, and it appears that I live in the state most punitive toward EVs regarding the ratio of EV fees to average ICE car gas taxes. In Arkansas, our EV fee is over two times what average ICE cars do in gas tax. Among the others who are most punitive are (in order) Wyoming, Mississippi, and Alabama. (Side note: In the South, whenever we want to feel good about being in a state with one of the worst stats regarding human welfare, we say "thank God for Mississippi" which is usually below us. Unfair I know.) The other sates that charge a fee are below 1 1/2 times the ICE gas tax. Most are below what ICE vehicles pay, and are thus incentivizing EVs.

What is also weird about these fees is that they are a flat amount, untied to usage of fuel like the conventional taxes are. Seems trivial for the DMV to get mileage driven data and charge fees based on that. But on the other hand, don't we all depend on transportation infrastructure, whether we are using it directly or indirectly, and so should all pay equally?

Well, ultimately that extra $100 I'm paying won't deter me from buying and driving my Model Y, so I guess from an economic standpoint, the state got it right -- charge a lot if the EV buyer won't balk. Not so much from an equity standpoint though when comparing to ICE vehicles.

There is a report about it here. Not an expert in these kinds of analyses, but seemed fairly comprehensive. See Figure 2.

 

[ItsNotAboutTheMoney]

Arkansas gas tax is 22c/gal state, plus 18.4c/gal Federal.
That's $0.404/gal.
$200/year/$0.404/gal ~ 495.05gal/year.
495gal/year x 25mpg = 12,375miles/year.

So, on average the amount isn't particularly bad, and given that the Model Y is a heavy vehicle (~4400lb), it's not unreasonable on average for a Model Y.

But it's a flat fee, and fuel taxes aren't which means that one of them is unfair.

Legislators are either not fixing long-standing unfairness, or they're adding unfairness.

It's very frustrating that politicians are taking the "they can afford it" attitude instead of either fixing the system properly, or just implementing something that copies the underlying characteristics of fuel taxation.

 

[David_Cary]

Isn't bad but much of that money should go to the federal government. The state is double charging to make up for the federal government getting nothing.

Now - does your state collect sales tax on electricity? You can get a bit extra mad about that if they do. On the other hand, they could have charged $500 a year.











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[ItsNotAboutTheMoney]

Arkansas gas tax is 22c/gal state, plus 18.4c/gal Federal.
That's $0.404/gal.
$200/year/$0.404/gal ~ 495.05gal/year.
495gal/year x 25mpg = 12,375miles/year.

So, on average the amount isn't particularly bad, and given that the Model Y is a heavy vehicle (~4400lb), it's not unreasonable on average for a Model Y.

But it's a flat fee, and fuel taxes aren't which means that one of them is unfair.

Legislators are either not fixing long-standing unfairness, or they're adding unfairness.

It's very frustrating that politicians are taking the "they can afford it" attitude instead of either fixing the system properly, or just implementing something that copies the underlying characteristics of fuel taxation.

I had it wrong. It's 21.5c/gal excise, 3c/gal wholesale sales tax and a 0.3c/gal environmental fee.
So, the fuel excise tax total is $0.399/gal
$200/year/$0.399/gal ~ 501.25gal/year
501.25gal/year x 25mpg = 12531.25 miles/year

Changes the numbers slightly, but not much.

https://www.dfa.arkansas.gov/images/uploads/exciseTaxOffice/2021MotorFuelsTaxRateAnnouncement.pdf

What's interesting here*, is that Arkansas seems to have different excise rates in border zones, in order to discourage cross-border purchases.
In the Texas border zone (which I assume would include Texarkana), it's 21c/gal state.

(Apparently Arkansas has had and maybe again has a similar principle applied to cigarette purchases).

* besides the browser page title being Dear Tiny Tim

 

[Ampster]

does your state collect sales tax on electricity?

No, but in California, cities and counties have added a Utility User Tax to make up some of what they lost with the Jarvis Tax Iniative in the 70's. It is trivial, especially since I have reduced my bills.