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NC DOT charging pure EV owners $100/year in lieu of gas taxes

Discussion in 'News' started by fdog, Jan 10, 2014.

  1. fdog

    fdog Member

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    Figured this would be coming, but I thought they'd wait until they had more BEV cars on the road... Looks like the Volt/Range extended cars won't be affected.

    NCDOT News Release

    From the article:

     
  2. liuping

    liuping Active Member

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    Taxing each gallon always seems like an illogical way to tax people for road usage since mileage varies so much. It really should be per miles driven. However, it's really strange to charge one type of car a set fee regardless road usage and all others (no matter how efficient) based on the amount of gasoline consumed.

    Not that the $100 tax is that bad. It's probably a lot less than most ice drivers pay, given that 12000 miles a year X 37.5 cents per gallon tax (the North Carolina Rate) / 30 miles a gallon = $150 per year.
     
  3. pgiralt

    pgiralt Active Member

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    I'm actually okay with this. We should pay our fair share of highway maintenance. The gas tax in NC is 37.6 cents today, so for someone who drives 12,000 miles a year, you are paying the equivalent of what you would pay on a car getting 45 mph ((12000 / 45) * .376). As average fuel efficiency keeps increasing, they're going to have to keep increasing the tax rates because people will be driving more and paying less tax.
     
  4. sranger

    sranger Member

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    If the money actually went for roads I would agree...but....
     
  5. travelinglites

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    As a frequent driver through NC, I can say the state has put a lot of money into highway maintenance in the past few years. They have gone from being some of the worst interstates I drive on to among the best. VA has an EV fee as well that I don't mind paying at all.
     
  6. RainmakerJL

    RainmakerJL Member

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    They are getting extra tax money from the electricity we buy too no?
     
  7. ThortsMD

    ThortsMD Member

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    We have the same law in Washington State.
     
  8. stevezzzz

    stevezzzz R;SigS;P85D;SigX

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    Colorado has just instituted a $50 annual fee for EV's.

    As for the wording of the NC statute, it seems ambiguous. If Volts get to skate, that's not very fair.
     
  9. artsci

    artsci Sponsor

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    So what do you think pays for road maintenance if taxes don't? I'm curious to know.
     
  10. Lloyd

    Lloyd Active Member

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    #10 Lloyd, Jan 11, 2014
    Last edited: Jan 11, 2014

    Sranger's point is that in many states, california included, road taxes have been used to balance state budgets, and were used to cover other items. There was an initiative in California several years ago to force the state to use the funds collected from fuel sales for repair on the roads. I believe this passed.

    Now the initiative to be decided in the next California election is the state wants to tax 1% of the value of the car EVERY YEAR. This will make the ownership of your Tesla in California Very expensive! About $2000+ per year for a model S Performance.

    Text of initiative:

    December 27, 2013

    Pursuant to Elections Code Section 9005, we have reviewed the proposed constitutional initiative related to funding for transportation programs (A.G. File No. 13‑0045).

    Background

    Transportation Funding. California spends an estimated $27 billion a year from a combination of state, federal, and local funds to maintain, operate, and improve its highways, streets and roads, passenger rail, and transit systems. About one-half of the funding comes from various local sources, such as sales and property taxes and transit fares. About one-quarter of the funding comes from the federal government and the remaining one-quarter comes from the state. The portion of transportation funding provided by the state comes from several sources.

    Fuel Excise Taxes. Currently, the state charges excise taxes of 39.5 cents per gallon on gasoline and 10 cents per gallon on diesel fuel used in vehicles operating on public roads. These taxes generate about $6 billion annually for state and local transportation programs.
    Vehicle Weight Fees. The state charges weight fees on vehicles that carry a heavy load, such as commercial trucks. These fees generate about $1 billion annually, which repay bonds that finance state and local transportation projects.
    Diesel Sales Tax. The state currently charges a sales tax on diesel fuel of 6.94 percent, which generates about $610 million annually for state and local transit.
    Off-Road Gasoline Excise Taxes. The state charges excise taxes on gasoline purchased for off-road uses, such as for off-road vehicles, agricultural equipment, boats, and planes. These taxes generate about $275 million annually. The state General Fund receives about half of these revenues, with the remaining half funding off-highway vehicle recreation, agriculture, general aviation, and boating programs.
    Miscellaneous Transportation Revenues. The state collects about $65 million annually from miscellaneous sources, such as rental income from properties owned by the California Department of Transportation. These funds are deposited in the state General Fund.
    Local Government Finance. The vehicle license fee (VLF), also called the motor vehicle in-lieu tax, is a tax on the ownership of a registered vehicle in place of taxing vehicles as personal property. The VLF is paid annually upon vehicle registration in addition to other fees, such as the vehicle registration fee, air quality fees, and commercial vehicle weight fees, all of which fund specific state programs. In 1998, the Legislature began a series of reductions in the VLF. The fee was reduced from a level of 2 percent down to a rate of 0.65 percent. Revenues from the VLF fund a variety of county and city services.

    Proposal

    New Tax on Vehicles. This measure amends the State Constitution to create a new tax on vehicles. Specifically, the measure creates an annual property tax on all vehicles registered in the state, at the rate of 1 percent of a vehicle’s value upon full implementation beginning on January 1, 2018. Under the measure, the tax would be phased in over four years in annual increments of 0.25 percent beginning on January 1, 2015. The Department of Motor Vehicles (DMV) would collect the tax when vehicles are registered each year.

    The measure specifies that commercial vehicles would be exempt from the new tax until July 1, 2016. If the state increases the excise tax on diesel fuel by at least three cents per gallon before July 1, 2016, then commercial vehicles would continue to remain exempt from the new vehicle tax established in the measure. If, however, the state does not increase the diesel excise tax before July 1, 2016, then the new tax would be charged on commercial vehicles beginning July 1, 2016.

    Additional Revenues for Transportation Programs. The measure requires that revenues from the vehicle tax be deposited in a new special fund—the California Road Repairs Fund. The measure also redirects about half of the revenues from existing off-road vehicle fuel taxes from the state General Fund to this new special fund. Monies in the California Road Repairs Fund would be continuously appropriated without further legislative action for the maintenance and repair of various transportation systems.

    40 percent for state highway repairs, with half of the funds for projects at any location in the state and half of the funds allocated to counties for qualified projects.
    25 percent for county roads.
    25 percent for city streets.
    10 percent for public transit.
    In addition, the measure redirects the state’s existing miscellaneous transportation revenues from the state General Fund to the California Road Repairs Fund. These funds would be continuously appropriated specifically for repairs and preventive maintenance on the state’s highways.

    The measure specifies that revenues in the California Road Repairs Fund shall be used only to supplement existing levels of funding for state and local highways, streets and roads, and public transit and that none of the funds shall be used to supplant existing fund sources generally available for such purposes. The measure also requires the state and local governments to report on how the additional funding provided is spent.

    Fiscal Effects

    Increased State Revenues. This measure would result in increased state revenues from the new tax on vehicles. As noted earlier, these revenues would be deposited in the California Road Repairs Fund to support state and local transportation programs. We estimate that state revenues would increase by about $400 million in the first year of implementation in 2015 and increase to between $3 billion and $4 billion annually upon full implementation beginning in 2018.

    Redirection of Existing Revenues. This measure would redirect about $200 million annually in off-road fuel taxes and miscellaneous revenues from the state General Fund to the California Road Repairs Fund, with the funds used to increase funding for state and local transportation programs. This would have the effect of reducing General Fund resources available for non-transportation programs by a corresponding amount.

    Increased Administrative Costs. This measure would result in increased administrative costs to the state and local governments. For example, the DMV would incur one-time costs to charge and collect the new vehicle tax. Under the provisions of this measure, these costs would be supported by a portion of the revenues generated from the new tax on vehicles. In addition, the new reporting requirements contained in the measure would result in a minor increase in administrative costs for state and local governments, which would be supported by the funding provided in this measure.

    Other Fiscal Effects. For many taxpayers, this vehicle tax would be deductible from their state income taxes and would therefore reduce the amount of revenue the state collects from income taxes. In many years, this reduction in General Fund revenues would reduce required state funding for schools and community colleges. The net reduction in General Fund resources typically would be in the tens of millions of dollars annually.

    Summary of Fiscal Effects. We estimate that this measure would have the following fiscal effects:

    Increased state revenues from a new tax on vehicles of $3 billion to $4 billion annually for state and local transportation programs.
    Reduced state General Fund resources of about $200 million annually for non-transportation programs, with a corresponding increase in funding available for transportation programs.
     
  11. Robert.Boston

    Robert.Boston Model S VIN P01536

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    MA has a personal property excise tax like CA's, though lower. Bites.

    One point to make against these annual road-use taxes: the purchase price of the car includes an expensive battery system, and the state harvested sales tax on that premium. Let's say that the battery $20k of the purchase price, relative to the cost of a similar ICE sedan; with a 6.25% sales tax on cars in MA, that means I paid an extra $1,250 of taxes already to the state. Maybe that goes into a different "pocket" of the state government, but that's not really my issue.

    This rule also strongly favors EVs with range extenders, e.g. the Volt. On a car like the BMW i3, getting the range extender avoids the annual tax while still being able to avoid paying the gasoline tax (mostly). Very odd.

    The better solution would be a uniform charge per 1,000 miles driven (possibly with a weight factor tossed in: a Hummer causes more road damage than a Honda Fit). Easy to implement in states that already require periodic inspections, as the inspection point can become the tax collector. The only inequity created by this rule is that the whole tax is collected by the state where the car is registered, whereas the current gasoline tax approach spreads out payments (more or less) pro rata to where the car is driven. Low population "drive-through" states like Wyoming would come out on the short end of this change.
     
  12. artsci

    artsci Sponsor

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    With all this discussion on taxes of various kinds and the fairness of it all, may I submit that we pay far, far less than the real social costs of just about everything we buy. What are those costs? To a thinking person it doesn't even need an explanation. Oil's a perfect example, but we could make a very long list of manufactured products, including the Model S. So IMHO a $100 cost for driving a Model S in North Carolina is a bargain.
     
  13. efusco

    efusco Moderator - Model S & X forums

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    $75 in MO for an "alternate fuel tax". Apparently its been around for a while, I had to pay it last year to get my first plates and just renewed for 2014.
    Calculated against my Prius it is probably slightly less, per year, than I was paying in taxes for gas. Certainly a LOT less than most vehicles.
     
  14. ToddRLockwood

    ToddRLockwood Active Member

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    In states where tourism represents a substantial percentage of the traffic on public roads, how do you collect road taxes from out-of-state vehicles if not at the gas pump? It's a tricky problem. Eventually, it could be done with GPS tracking.

    North Carolina's $100 fee seems quite arbitrary. What about plug-in hybrids, or even regular hybrids for that matter? If such a system is based around gasoline consumption, EV's should be paying based on MPGe and miles driven.
     
  15. liuping

    liuping Active Member

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    We'll that would truly suck. It effect a lot more than Tesla though. Even inexpensive ice cars are $20k, so that's at least an extra $200 per car a year for many people. I have a feeling it will not pass. It too easy to point out how much exactly is will cost each family.
     
  16. Lloyd

    Lloyd Active Member

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    To add to the point, California already does this for boats and planes.
     
  17. brianman

    brianman Burrito Founder

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    Going to have to disagree with your here. Out-of-state vehicles are "guests". Do you charge guests (a portion of) real-estate taxes when people stay at hotels? Why not? Discouraging tourism is a bad thing. And GPS tracking of guests is an even worse thing.
     
  18. cwerdna

    cwerdna Active Member

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    Doesn't seem that illogical. I'm not in favor of mileage based taxes as they are a slight disincentive to buy more efficient vehicles.

    There is generally some relationship between heavier ICEVs and poorer gas mileage. And, those heavier vehicles put more wear and tear on the road.
     
  19. huntjo

    huntjo Member

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    Well $2000 is a bit of an exaggeration. There are no $200,000 Teslas yet. I believe the yearly ownership fee in Colorado is about 1% as well. I think I just re-upped about a thousand bucks to the county tax assessor. I've been meaning to look into whether that is deductible from state taxe returns every year or just on purchase price.
     
  20. Turtle

    Turtle Member

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    Its already expensive to live here, now more taxes:mad:
     

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