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

[Xenoilphobe]

Virginia charges $64 per year for BEV & Hybrids and $25 per year for the clean vehicle plates - which are needed to drive in the HOV Lanes. These fees are above and beyond the regular tags and title fees ($45.75 for title).

Virginia DMV no longer issues HOV plates and only those of us that are grandfathered with the old plates can use HOV. We don't get any sales tax relief or any parking or toll relief either. Additionally Virginia charges us annual sales tax on the value of the car annually at 4%. So we are taxed to buy electricity, double taxed on plates, Taxed for road use and pay taxes on the value of the car annually (in my case $3707 for the first year in addition to the sales tax paid - in my case $4480)

So first year costs for Tesla P85 in Virginia just in fees and taxes $8312 - so much for my $10K federal tax rebate! No sure what services this provides- because they sure don't monitor HOV on 66 East in the morning!

 

[artsci]

Virginia charges $64 per year for BEV & Hybrids and $25 per year for the clean vehicle plates - which are needed to drive in the HOV Lanes. These fees are above and beyond the regular tags and title fees ($45.75 for title).

Virginia DMV no longer issues HOV plates and only those of us that are grandfathered with the old plates can use HOV. We don't get any sales tax relief or any parking or toll relief either. Additionally Virginia charges us annual sales tax on the value of the car annually at 4%. So we are taxed to buy electricity, double taxed on plates, Taxed for road use and pay taxes on the value of the car annually (in my case $3707 for the first year in addition to the sales tax paid - in my case $4480)

So first year costs for Tesla P85 in Virginia just in fees and taxes $8312 - so much for my $10K federal tax rebate! No sure what services this provides- because they sure don't monitor HOV on 66 East in the morning!

I'm pleased I don't live in Virginia

 

[Lloyd]

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.

Yes, but the 1% is on top of the already high registration fee. Currently about $1200 for my model S.

 

[MarkR]

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.

i appreciate your approach to the tax issue. It's true that a Hummer's weight does more damage to the roads and they deserve to pay more taxes . . . but the same is true with nearly all of the heavy vehicles. Their weight is generally associated with crumby gas mileage and they do pay more taxes. It's true for Hummer's and pickups, and a host of other large vehicles.

 

[Plug Me In]

Virginia charges $64 per year for BEV & Hybrids and $25 per year for the clean vehicle plates - which are needed to drive in the HOV Lanes. These fees are above and beyond the regular tags and title fees ($45.75 for title).

Virginia DMV no longer issues HOV plates and only those of us that are grandfathered with the old plates can use HOV. We don't get any sales tax relief or any parking or toll relief either. Additionally Virginia charges us annual sales tax on the value of the car annually at 4%. So we are taxed to buy electricity, double taxed on plates, Taxed for road use and pay taxes on the value of the car annually (in my case $3707 for the first year in addition to the sales tax paid - in my case $4480)

So first year costs for Tesla P85 in Virginia just in fees and taxes $8312 - so much for my $10K federal tax rebate! No sure what services this provides- because they sure don't monitor HOV on 66 East in the morning!

And don't forget the gasoline tax was effectively lowered and replaced with a special general sales tax, which I think is a little higher even in NoVa.

 

[Xenoilphobe]

We are pleased too! We really don't need any more congestion in Northern Virginia. On second thought maybe they should raise the taxes!!!

Maryland is great - Casinos, Racetracks and awesome ball parks and wonderful waterfronts! They just need to install a Supercharger in Ocean City so I can drive the car to the beach this summer!

- - - Updated - - -

Time to buy a beach house in Delaware or Maryland and register the cars there...

 

[liuping]

Additionally Virginia charges us annual sales tax on the value of the car annually at 4%. So we are taxed to buy electricity, double taxed on plates, Taxed for road use and pay taxes on the value of the car annually (in my case $3707 for the first year in addition to the sales tax paid - in my case $4480)

4% annually for cars definitely sucks.

On the other hand, in CA we already have almost 2x Virginia's sales and income tax, and our electricity is 3 to 4x more expensive.

At least there was a EV incentive of $2500 to offset some of the $7300 in sales tax.

 

[AMPd]

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.

My California DMV registration fee calculator is showing that my registration fee would be $920.00 on 129,000.00 vehicle purchase price, with a 1% increase, it would bring that fee close to $2000 if not over 2000

 

[dmckinstry]

We have the same law in Washington State.

Yep. I'll have 65+ years of driving to make up for the sales tax I didn't have to pay.

 

[Nubo]

A flat fee is blatantly unfair when other drivers are taxed proportional to how much they drive. I think a case could be made that it is unconstitutional.

 

[djplong]

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.

Taxing by the gallon actually makes more sense.

A mile driven by a Prius does far less wear and tear on a road than a mile driven by an 18-wheeler. It's not a perfect adjustment since the truck does thousands of times more damage to the road than a small car, but it's a step in the proportional direction.

 

[hcsharp]

I'm all for paying for what I use, but where is the credit for what I save my state? I can't begin to add up the cost of pollution from burning gas. There's air pollution, global warming, oil spills, the costs associated with monitoring and enforcing the environmental laws that protect us from even more pollution, leaking underground fuel tanks, the list is endless.

If you really want to tax vehicles to the extent they cause road repairs, you need to raise heavy truck taxes about 100 times higher than they are now.

 

[dratifk]

Am I missing something. I'm sure these states with Taxes yearly on the car give you a break elsewhere. Here in NY we pay very high Property Taxes. My county is #1 in the USA. I pay $25K/year on a Property assessed at around $680K. Our State income tax is high also. Only good thing is one time car tax at purchase with no additional Tax. I also have a Volt and so far have 23K electric miles and 2K ICE miles. Another tid bit in NYS you are allowed to Deduct up to 10K/year in 529 (child education fund) from NY income tax. Although in NY we have very high Tolls and Bridge crossings.

 

[ItsNotAboutTheMoney]

Taxing by the gallon actually makes more sense.

A mile driven by a Prius does far less wear and tear on a road than a mile driven by an 18-wheeler. It's not a perfect adjustment since the truck does thousands of times more damage to the road than a small car, but it's a step in the proportional direction.

Except for YMMV. Hybrids and electrics have just lifted the veil of stupidity from an easy system and they're hitting an easy target.

Odometer. Odometer. Odometer.

 

[PhilBa]

A gas tax is a pretty good proxy for road wear and miles driven. Not only does it track heavier vehicle usage but it's easy to collect and uses existing tax systems. Plus it also encourages fuel economy to some extent and captures tourist travel as well. Taxing actual mileage is going to require a new system that includes odometer verification. I don't think there is a state that is set up to do that now. I don't expect the flat fee model to live forever but I don't see it as particularly bad.

I got curious about how much an ICE pays vs EV in my state. The EV flat fee is $100/year. The gas tax in my state is $0.375 per gallon. Assuming 12000 miles annual driving, a 30 MPG ICE will pay $150 in gas tax. So that $100 fee is looking kind of nice to me. A 45 MPG ICE car will pay $100 in gas tax which is about what a typical small hybrid will get. I didn't factor in the federal tax ($0.184/gallon). If they were to go to flat fee per car, they would need to get about $183 per car to break even over the gas tax (based on average fuel economy of 24.6 mpg.

Given that the fleet economy is improving, they are gong to need to do something to avoid falling road use revenues. I certainly hope my state doesn't go back to a tax on the value of a car.

 

[Lloyd]

Yes, but the edict of Government now is to PROMOTE the use of EV's. What's the point if they are taxed at an increasing rate? I believe that states should not tax EV's at all to assist in their use and numbers. When the numbers get up there to the point that they affect the ability to repair the roads, ie: 25 to 30%. then we need to talk about taxing them. JMO

 

[ItsNotAboutTheMoney]

Yes, but the edict of Government now is to PROMOTE the use of EV's. What's the point if they are taxed at an increasing rate? I believe that states should not tax EV's at all to assist in their use and numbers. When the numbers get up there to the point that they affect the ability to repair the roads, ie: 25 to 30%. then we need to talk about taxing them. JMO

I don't see it as contradictory. Charge appropriately, subsidize appropriately. Appropriately means helping to overcome the barriers, not encouraging a culture of inefficiency.

EVs shoukd pay the same amount per mile to use the road as an ICEV of the same weight.
If you want more EVs you provide purchase support and make it easy for people to have access to charging (not free charging!). To pay for the subsidies, you tax according to the reasons for encouraging EVs, taxing the incumbent fuels or using general taxation.

 

[Lloyd]

It's not about the money. :smile:

 

[dflye]

It's not about the money. :smile:

Exactly! The annual charge to NC EV owners is about the cost of a single decent meal for a family at a restaurant. At least to me, it is entirely about the uneven taxes / fees, and nothing to do with the nominal annual fee.

Now if the fee was based strictly upon vehicle weight (the max loaded weight for trucks / cars, not the empty weight!) multiplied by miles driven per year divided by number of axles, I'd be all over that. Anything else is just a lazy mockery of a balanced distribution of the expense of maintaining the roads.

Note this is strictly dealing with the cost of building and maintaining the roads, and has nothing to do with any other impacts a particular vehicle has upon the world; that should be an entirely different sort of tax: Darwinism Tax, Stupidity Tax, Faux News Tax, whatever you want to call it.

 

[PhilBa]

Yes, but the edict of Government now is to PROMOTE the use of EV's. What's the point if they are taxed at an increasing rate? I believe that states should not tax EV's at all to assist in their use and numbers. When the numbers get up there to the point that they affect the ability to repair the roads, ie: 25 to 30%. then we need to talk about taxing them. JMO

I'm sure what you say is correct for CA but not every state has that as an objective. In WA, EVs have been exempt from sales tax. I don't find it unreasonable that I am asked to help maintain the roads that I drive on. Especially when my car weighs more than 2 tons. Also, I'm pretty sure that trucks pay, via the fuel tax, a considerably larger amount that I do. But, as you imply, the EV contribution will round to zero for some time to come, no matter what the tax rate is. The point is they wanted to establish the principle that EVs pay road use fees of some sort.