Kansas - Proposal to Double Tax EVs

[swaltner]

Kansas legislature is trying to implement a double tax on EVs since we aren't paying for road maintenance through the excise tax on gasoline sales.

In Kansas there is currently a 18.4 cent/gallon federal tax on gasoline and a 24.03 cent/gallon state tax on gasoline. Fuel taxes in the United States - Wikipedia To make up for the lack of paying road taxes through gasoline purchases, Kansas implemented a $70/year premium on yearly license plate fees for EVs. The base registration fee on a car is $30/year and the base registration fee on an EV is $100/year. That does not include property tax and a few other fees. The $70 premium on your license plate is the equivalent to the state tax on 288 gallons of gasoline. For a vehicle that gets 30 mpg, that's equal to 8,640 miles of driving each year. I didn't complain when this increased registration fee was introduced in the 2019 legislative session Kansas Department of Revenue - News - 12-13-2019 Electric and hybrid vehicle owners to see change in registration fees

Now, Representative Bill Rhiley | Legislators | Kansas State Legislature has introduced HB 2488 | Bills and Resolutions | Kansas State Legislature which aims to double tax electric vehicle owners.

Establishing the EV energy equity road repair tax act and providing for a road repair tax on electricity distributed from a public charging station for electric vehicles.

This bill will enact a 3 cent/kWh tax on all electricity provided by public charging station. A "Public charging station" means "any device or infrastructure that supplies electricity to the public for the charging of an electric vehicle. "Public charging station" does not include such a device or infrastructure located at a primary residence." This applies even for charging facilities that give electricity away for free. Penalty for not paying the proper tax to Kansas is punishable by a $25/kWh fine (minimum: $5,000 maximum: $50,000) and/or 30-365 days in jail.

There are so many things wrong with this. The biggest is that the 3 cent/kWh fee is a double taxation on the stated goal of recovering lost road taxes since they are already receiving that with the higher registration fees. Many EV charging stations have been installed without any monitoring capabilities. There is no way to determine how many kWh were delivered each year on these installations. On top of that, the definition of public charging station is so generically written ("any infrastructure") that someone would be subject to a fine and jail time if a 3rd party put an entry on PlugShare for an electric outlet on the outside of a building.

The bill was introduced on Jan 18, 2022 and went to the Committee on Transportation. Current members of that Committee are:

Chair​

• Rep. Richard Proehl

Vice Chair​

• Rep. Leo Delperdang

Ranking Minority Member​

• Rep. Henry Helgerson

Members​

• House
• Rep. Barbara Ballard
• Rep. Shannon Francis
• Rep. Nick Hoheisel
• Rep. Michael Houser
• Rep. Steven K. Howe
• Rep. Trevor Jacobs
• Rep. Jim Minnix
• Rep. Lance W. Neelly
• Rep. KC Ohaebosim
• Rep. Pat Proctor
• Rep. Joe Seiwert
• Rep. John Toplikar
• Rep. Ponka-We Victors
• Rep. Virgil Weigel

Edit: To put a number on the proposed tax, last year, My Model 3 consumed 5,250 kWh (most of which was done at home) for 15,703 miles of driving. 3 cents per kWh would come out to $128.31 for that much electricity if it was all consumed at "public charging stations".

 

[taztrooper]

Thanks for the great write-up. I was not aware of this bill.

 

[charlesj]

I am surprised that they don't require odometer check to see miles drive each year and pay a fair fee on that instead of all this nonsense.
There needs to be a class action lawsuit about being taxed twice.

And, come to think of it, while they are at it, why not check those hybrid cars that get really good MPG as they pay less taxes for the same miles drive as a gas hog. Maybe I should not give them ideas.

 

[swaltner]

Luckily, this bill died in committee this year. It will be something to keep an eye on though and make sure any new members on the Committee on Transportation understand this is double taxation and any similar bill in the future meet a similar fate.

Kansas doesn’t have vehicle inspections (other than a one-time VIN inspection to check for stolen vehicles on out-of-state titles as vehicles are brought into the state), so doing yearly mileage checks would be a nuisance to implement. I do agree that a more equitable way to collect road taxes as we move from gasoline to electricity would be mileage checks, but I don’t see that happening any time soon.

 

[charlesj]

...

Kansas doesn’t have vehicle inspections (other than a one-time VIN inspection to check for stolen vehicles on out-of-state titles as vehicles are brought into the state), so doing yearly mileage checks would be a nuisance to implement. I do agree that a more equitable way to collect road taxes as we move from gasoline to electricity would be mileage checks, but I don’t see that happening any time soon.

Then the question is how many electric vehicles in the state. We do smog checks every two years. I lived in NJ once many years ago. Had vehicle inspection.
It could be self-reported annually and then officially checked every few years and any mischief caught up with penalty?

 

[starship42]

Data point, Nebraska “EV fee” is a flat $75 a year additional on top of all the other registration fees, to offset the lack of gas taxes collected for EVs.

 

[OrbiterTI4]

I may be giving too much credit to the state Rep, but I'm wondering if the intended target is tourists/pass-through drivers (and KS residents who use public charging are just an added $ source in his eyes).

I and a friend fall in the former category; I have done a few trips on I-35/335/US-81/75 over the years, but my friend makes multiple roundtrips a year of TX to MO in an EV.

 

[ThomasD]

Kansas lawmakers want to tax public EV charging

Home charging wouldn't be taxed, though, which has some calling foul as it penalizes those who rent and are dependent on public charging.

www.greencarreports.com

 

[ucmndd]

The answer is pretty obviously yes

 

[Feathermerchan]

In my mind the fair way would be to tax per mile driven. In Tx they record your odometer every year for state inspection anyway.

 

[AMPd]

Honestly think we should be moving toward a per mile tax rather than this or the current registration fee structure. As ICE/hybrid vehicles get more efficient we need to figure out a fair system.

Along with per mile tax, institute different vehicle weight categories. That way the heavier vehicles (hummer ev) that put more strain on the infrastructure pay a bit more.

 

[Tam]

In my mind the fair way would be to tax per mile driven. In Tx they record your odometer every year for state inspection anyway.

Agreed.

As pointed out by the article, EV registration is already higher in that state.

If they tax the stations, they need to make the registration equal.

I also agree that the fair way is the odometer report for all cars ICE and EV and others.

Odometer could be an honor system with random audits to keep everyone honest. Audit could be an app from cell phone to take the picture of the dashboard or the car's app. It could be done in person as needed too.

 

[ucmndd]

Per mile tax does seem the most “fair” way to accomplish things but has significant privacy and logistical concerns.

What if I drive 50% of my miles in another state?

GPS trackers or other data collection devices have all sorts of privacy issues.

“On your honor” mileage reporting is an invitation for fraud and has the same problems when it comes to driving across state lines.

 

[Tam]

...What if I drive 50% of my miles in another state?...

Good point!

For simplicity, it might imitate the car sales tax in California: The tax is based on the registered address and not the actual out-of-state living arrangement like students or military living overseas.

US citizens working overseas exclusively for years still have to pay US tax even when they don’t actually work in the US.

It's not fair but that’s how the bureaucracy works: It's based on paperwork and not actual life.

 

[beatle]

To really get a picture of what causes road wear, see this article/chart:

Chart of the Day: Vehicle Weight vs Road Damage Levels

Via Pedal Fort Collins, here’s a simple chart showing the basic relationship between vehicle weight and the amount of “damage” or wear that is caused to the roadway. The relations…

streets.mn

A Model S would be around a 2 or 3 on this scale, so a rig hauling stuff would be 200 times more damaging to roadways (well, actually much, much more when you consider the weight of the trailer may put it close to 80,000 lbs. Proportionally taxing trucks will drive up the cost of shipped goods (basically everything) to cover the tax. Not saying that's right or wrong, but it would happen.

 

[swaltner]

This was tried in last year's legislative session. Luckily, it didn't make it out of committee then. I'm hoping for the same fate.

Kansas - Proposal to Double Tax EVs

Yeah, it's pretty stupid logic that as a Kansan, I need to pay a vehicle charging tax since I don't pay the gasoline excise tax, where I already pay $70 extra for the license plate on my EV compared to my gasoline car. For Kansas, the $70 extra on the yearly license plate fees is the gasoline tax on 291 gallons of gasoline.

While this is a new house bill for the new legislative session, maybe this should be merged with the thread I started last May on the bill from last year...

 

[ItsNotAboutTheMoney]

Kansas lawmakers want to tax public EV charging

Home charging wouldn't be taxed, though, which has some calling foul as it penalizes those who rent and are dependent on public charging.

www.greencarreports.com

Yes. Iowa already taxes public charging.

 

[ItsNotAboutTheMoney]

To really get a picture of what causes road wear, see this article/chart:

Chart of the Day: Vehicle Weight vs Road Damage Levels

Via Pedal Fort Collins, here’s a simple chart showing the basic relationship between vehicle weight and the amount of “damage” or wear that is caused to the roadway. The relations…

streets.mn

A Model S would be around a 2 or 3 on this scale, so a rig hauling stuff would be 200 times more damaging to roadways (well, actually much, much more when you consider the weight of the trailer may put it close to 80,000 lbs. Proportionally taxing trucks will drive up the cost of shipped goods (basically everything) to cover the tax. Not saying that's right or wrong, but it would happen.

That chart is simply using the 4th-power rule with 4000lb = 1.
The 4th power rule is the idea that damage to the road is based on the 4th power of the vehicle weight.
However, that's an oversimplification.
The actual 4th power rule is, I believe, closer to: the amount of damage done is proportional to the 4th power of the excess axle weight compared to the load-bearing weight of the road.
So, a moderately loaded big rigs won't do much to an Interstate, but would obliterate your residential street.
Similarly, light vehicle weights don't really matter much as the roads are built to take much higher weights.
And of course there's other damage. Our big winter problem is frost heaves which happen when there are large temperature swings.

 

[swaltner]

To answer the question in the subject, yes, this would apply on Tesla Superchargers. Tesla would pay it, but they don't necessarily need to pass it on to the customer. The bill even requires you to pay the tax if you give away the electricity for free. Costs for installing new public charging stations and retrofitting all existing stations would be high because you couldn't just install an outlet or an unmetered EVSE at your location. You must have some form of monitoring system to know how many kWh were delivered.

Penalties are huge: "A violation of the bill’s provision involving failure, neglect, or refusal to render the road repair tax to the Director would be an unclassified misdemeanor and any person convicted would be punished by a fine of $25 per kilowatt-hour of energy that the tax is found to not have been remitted to the Department of Revenue, imprisonment in the county jail for not less than 30 days or more than one year, or by both fine and imprisonment. Any other violation could also result in a fine of $5,000 up to $50,000, or imprisonment in the county jail for not less than 30 days or more than one year, or by both fine and imprisonment."

As written, if your business had a 120V outlet that was accessible and someone charged their EV at the outlet, you would be subject to a $25/kWh fine and jail time of 1 month to 1 year.

 

[ItsNotAboutTheMoney]

Per mile tax does seem the most “fair” way to accomplish things but has significant privacy and logistical concerns.

What if I drive 50% of my miles in another state?

GPS trackers or other data collection devices have all sorts of privacy issues.

“On your honor” mileage reporting is an invitation for fraud and has the same problems when it comes to driving across state lines.

You pay to your state. Person in another state driving in your state pays to their state.
States could argue about cross-border traffic.

Fuel tax also has some cross-border issues. I'm sure that cross-border commuters don't fill up proportionally.

Fuel tax sucks in a bunch of ways, per-mile will suck in some ways too, but at least once you make the change, legislators can stop seeing efficiency as a threat.