Need help with fighting EV tax -- Calling all math wizards

[cadurney]

BLUF: I am a Grammar nerd -- the kid the jocks beat up in school so I would help them with their English assignments. I am not a mathematician by any measure. I need help fighting a state senate bill calling for an EV tax. My argument is that if EVs are to be taxed, it should be at a rate consistent with fuel tax rates, but taking into regard the equivalent MPG.

In Arkansas, the current fuel tax is .215 per gallon. If my 85D gets about 110 MPG equivalent, and I, say, 'fuel up' every night for an hour or two, and it costs me .07 cents per kilowatt hour, what would be an equivalent amount of 'gasoline?' What would be the equivalent tax burden?

I'm writing my state senator to vote against the bill in favor of a more favorable/fair assessment. Is there any one out there who can figure this out?

 

[aesculus]

You are correct.

(miles/year) / (miles/gallon) * (tax/gallon) = (tax/year)
where (miles/gallon) is your MPGe and the (tax/year) is really a (tax/year) equivalent

Just delete the unit components top/bottom and you end up with your tax/year equivalent.

But here's the rub: At the pump they know exactly how much gas you have pumped, and yes, more efficient cars pay less of a tax than less efficient cars. In your case how are they going to determine:

• How many miles you drove in a year?
• What car you were driving
• and what it's MPGe is? (this is just a table from the EPA but the state has to maintain links to it etc so their head is going to burst)

Some bureaucratic process is already in place to do the gas thing and a new one would have to be built for the EV world. Sure it needs to be done but my guess is that nobody would want to take this on and try to ramrod it through the legislative process for the few dollars it generates vs the cost of managing such a program. Initially it would be a loser financially because the cost to manage the program would far outweigh the fees they collect.

Hence they would probably just invent some flat tax for EV's until they become popular enough to require such a system. And then get ready for them to find a way to automatically require all manufactures post the miles per year a car drives in each state etc. Now my head is starting to hurt.

 

[RayW]

I think you need to move out of Arkansas

 

[cadurney]

You are correct.

(miles/year) / (miles/gallon) * (tax/gallon) = (tax/year)
where (miles/gallon) is your MPGe and the (tax/year) is really a (tax/year) equivalent

Just delete the unit components top/bottom and you end up with your tax/year equivalent.

But here's the rub: At the pump they know exactly how much gas you have pumped, and yes, more efficient cars pay less of a tax than less efficient cars. In your case how are they going to determine:

• How many miles you drove in a year?
• What car you were driving
• and what it's MPGe is? (this is just a table from the EPA but the state has to maintain links to it etc so their head is going to burst)

Some bureaucratic process is already in place to do the gas thing and a new one would have to be built for the EV world. Sure it needs to be done but my guess is that nobody would want to take this on and try to ramrod it through the legislative process for the few dollars it generates vs the cost of managing such a program. Initially it would be a loser financially because the cost to manage the program would far outweigh the fees they collect.

Hence they would probably just invent some flat tax for EV's until they become popular enough to require such a system. And then get ready for them to find a way to automatically require all manufactures post the miles per year a car drives in each state etc. Now my head is starting to hurt.

Thank you very much! Again, I'm not a math wizard (really, I'm math challenged), I get about $30.00 per year, based on 110 MPGe.

 

[SSonnentag]

What are fuel taxes used for? If used to build, maintain and repair roads, then the current tax doesn't make much sense. What wears out roads is weight and miles, neither of which have a direct correlation to MPG or MPGe. So your proposal, while saving EV owners money (not a bad thing in our opinions) is not really a fair tax solution.

 

[SSedan]

I demand my rich person tax break!!!!!!!

You use the roads, for now the easy way for you to contribute to such is what many states are doing and add a higher annual registration fee.
This is more efficient than having them hit you up for mileage or something.

 

[ItsNotAboutTheMoney]

I demand my rich person tax break!!!!!!!

You use the roads, for now the easy way for you to contribute to such is what many states are doing and add a higher annual registration fee.
This is more efficient than having them hit you up for mileage or something.

It would also be more efficient to have _everybody_ pay a fixed fee. But that's not what's being proposed.

Stopping this isn't about avoiding payment, it's about making sure that states come up with a pricing system that doesn't have the bad consequences that the current fuel tax system has. The first modern hybrid was sold in the USA in 1999. It's 20 years later and because politicians still haven't fixed the system, they talk about fairness, but their "solution" is a fee that's inconsistent with the way it works for the vast majority of vehicle users.


An extra annual fee would have to be included in the registration system.
An extra mileage fee would have to be included in the registration system. Mileage requires an odometer reading. You already give the odometer reading. There is no extra information required for a basic mileage-based system.

 

[OrbiterTI4]

When living in MO, there was an annual windshield sticker required for EVs (in addition to the annual registration fee/license plate stickers) to make up for the lost fuel taxes. I believe the annual fee was $70 in 2015 when I moved.

RE how to track annual mileage: does the state have an annual required safety inspection when renewing vehicle registration? Is there a personal property tax on vehicles where mileage is reported annually?

 

[trm2]

An extra annual fee would have to be included in the registration system.
An extra mileage fee would have to be included in the registration system. Mileage requires an odometer reading. You already give the odometer reading. There is no extra information required for a basic mileage-based system.

What do you mean you already give the odometer reading? Is that a Maine thing?

 

[D.E.]

I don’t see a good solution. My surtax is $200 per year now. I don’t drive it enough to justify that level of tax, still for me that’s just a part of the car cost of ownership.

The amount of tax paid on a gallon of gas isn’t really directly assignable to the individual wear or cost of roads, it’s just an easy pain free way to collect that sum of money. Since we don’t pay that fuel surtax, the knee jerk response was to just tax us $100-200 extra per year to make up that perceived burden we were seen as shirking. As far as the benefits we provided, well, they don’t bother with that part of the equation.

Legislators aren’t very good at thinking sometimes. They often see a deficit and a population they can tax to fill that deficit, even if the two are not even remotely connected.

In Tennessee a number of years ago, they saw a need to fund neonatal intensive care units. They decided to impose a tax on professionals so anyone that needed a state professional license found a sudden multi-hundred dollar surtax on their yearly license. Those taxed had not the remotest connection to state costs of neonatal intensive care. I think some groups were specifically exempted. So that tax became a part of life, not because those groups had anything special to do with the specific legislative funding deficits, but because they saw the target population as a quick and easy source of income.

If we taxed based on highway use, miles driven, etc., there’s a real possibility we’ll be seen as a deep pocket source to fund whatever the current deficit of the day is. While I don’t enjoy the $200 EV surcharge, there’s some risk when legislators reassess these charges. I can tell you one thing, whatever they do it’ll never ever be less than the $200 per year I pay now.

 

[ewoodrick]

Just don't worry about the tax, even $200 isn't that much to pay for road keep.

As with anything, the government is just looking on how to make more money.

Us in Georgia had a $5000 rebate for a few years, to be followed by a $200 road tax the next. The just couldn't figure out what their priorities were.

 

[SSonnentag]

I still favor a tire tax. Cars that are easy on tires are also easy on roads, and vice versa. It's clean, simple and doesn't require a bunch of overhead time and expense in collecting mileage and such. It's also pretty anonymous, which I also favor.

 

[Science fan]

BLUF: I am a Grammar nerd -- the kid the jocks beat up in school so I would help them with their English assignments. I am not a mathematician by any measure. I need help fighting a state senate bill calling for an EV tax. My argument is that if EVs are to be taxed, it should be at a rate consistent with fuel tax rates, but taking into regard the equivalent MPG.

In Arkansas, the current fuel tax is .215 per gallon. If my 85D gets about 110 MPG equivalent, and I, say, 'fuel up' every night for an hour or two, and it costs me .07 cents per kilowatt hour, what would be an equivalent amount of 'gasoline?' What would be the equivalent tax burden?

I'm writing my state senator to vote against the bill in favor of a more favorable/fair assessment. Is there any one out there who can figure this out?

I would hate to believe that this new tax is motivated by the oil industry buying state level corrupt senators (just like the auto dealer associations bought out the same parasites when Tesla wanted direct sales to customers). To discourage purchase of electric cars through taxation makes little sense to me. The air pollution caused by ICE cars costs society more than that caused by electric cars. Electric car owners pay taxes on the electricity that they use, increasing their share of the burden of providing power for everyone. The oil industry is given billions in incentives through many types of tax breaks as well as discounted use of federal lands for oil exploration and depletion. Their corporate taxes are lower than our individual taxes. Rather than capitulating to the oil industry, which has robbed us blind and polluted us into poor health over the decades, I would argue that there should be no additional tax on electric cars.

All that said, the federal tax on gas is 18.4 cents per gallon. If the average driver is paying about 50 cents per gallon in state tax, then the tax per gallon would be 68.4 cents. If an average car is driven 13,000 miles per year and average gas mileage is 27, then the average driver of an ICE vehicle is using about 481 gallons per year and is paying about $329 per year. If electric cars rate an equivalent of 90 miles per gallon then one could argue that, if they had been ICE vehicles, they would be paying about $100 per year in state AND federal taxes.

 

[pears]

I am also interested in this. One thing about a Tire Tax is that it doesn't work very well in states where there is a lot of tourism, or is a drive through state. Fuel tax still charges users who drive through enough to need to refuel, tire tax doesn't capture all of these users.

I'm not sure there is a perfect answer for _all_ vehicles. Maybe for EV vehicles only, a tire tax? or just a mileage based fee when renewing tags?

 

[drklain]

I disagree with those who say a fuel tax isn't a good method of paying for roads/bridges. Wear and tear is directly related to miles driven on the roads and fuel used is directly related to miles driven. Yes a heavier/larger vehicle causes more wear and tear than a lighter/smaller vehicle. It is also true that, in general, heavier/larger vehicles are less fuel efficient than lighter/smaller vehicles and thus get less miles per gallon of gas burned (thus using more fuel/paying more fuel taxes for the same number of miles driven). A fuel tax is actually a very good way to pay for road infrastructure because the amount of tax paid is proportional to the amount driven and wear/damage caused. It is not perfect, but it is also a much easier method than a system of tracking miles driven and then charging a tax based on miles driven and vehicle weight.

Where the system does fall off is with respect to Hybrids and other fuel efficient vehicles who pay less than their fare share....and its even worse for BEVs who pay no fuel taxes at all. The solution is some other method to tax those vehicles and (short of requiring a lot of infrastructure to tax the electricity in some manner) a good technique is a flat tax which (hopefully) is equivalent to the amount of fuel tax a similar size/weight car would pay in a given year. Of course the problem is that if you are a low or high mileage driver, you end up paying too little or too much, but it is a simple workable system. Over time as BEVs become a greater percentage of the vehicles on the road, the flat tax will either have to be adjusted or another (probably a miles driven based) system will have to be adopted for all vehicles.
--------
Here's an example: In Virginia, the fuel tax is 16 cents a gallon. Let's do a comparison assuming the car drives 12,000 miles a year:

BMW 7 series (about the same size/weight as a Model S):
20 MPG (this is about the best it will do with all highway driving) over 12,000 miles equals 600 gallons used. At 16 cents per gallon, that's $96 paid in fuel taxes that year.

Model S
No fuel taxes paid but I pay a $64 electric vehicle surtax on my car registration fee. So while the BMW paid $96 in taxes, I paid $64. If we drove the same number of miles, I came out ahead and only paid 2/3 of the taxes paid by the BMW. Of course, if I drove fewer miles, I eventually hit an "equal tax" rate and below that I actually lose out. To my mind, the Virginia approach is quite fair. I pay taxes that go to roads but at a lower rate than ICE cars which rewards me for helping the environment. In effect, given an average 12,000 miles per year usages, I get about a 1/3 discount.
------
Now let's look at the same scenario in California (a high tax state) where the fuel tax is 41.7 cents a gallon. Near as I can tell, by 2020 Californians driving BEVs will pay $100 more than ICE cars. So here's the math:

BMW 7 series - $282 in fuel taxes
Model S - $100 in registration fees

In this scenario, a BEV is paying $35% of what the BMW paid -- a whopping 2/3 discount! California is further rewarding BEV ownership with less taxes.
------
Of course the problem with either of these scenarios is that, as BEVs become a larger and larger portion of the vehicles on the road, net revenue drops and there are less funds to pay for those roads/bridges etc. At that point the only solution is to raise the fees paid by electric cars or jack up the fuel taxes even more or both.

The point I'm trying to make is that those who say a fuel tax is not a good, efficient and economical way to tax road usage have yet to present a better alternative. What we should all be pushing for is some method that can accurately (and fairly) capture EV use so that we don't get screwed and end up paying too much...but we should also not be paying too little or the entire system breaks down.

 

[appleguru]

Tax should be flat for all vehicles and based on GVWR and mileage driven.

Most states already do an annual safety/emissions inspection and collect mileage, so just assess and collect the tax then.

If you want to incentivize EVs, at the same time, that’s ok too... just add a scaler for the tax based on EPA rated fuel economy.

 

[drklain]

Not disagreeing that this is a way it might be done for states that require an annual inspection (15 states don't by my count). I was just pointing out that fuel use is directly related to miles driven and weight and that it acts as an effective way to collect the money because the infrastructure is all set up that way. There are clearly other ways to do it (and something different will be necessary if electric vehicles become the majority of cars on the road...somewhere I believe we will eventually be in a few decades). My point is that there are a lot of people on this list who seem to believe they shouldn't have to pay any tax/fee because they drive EVs and "help the environment/public health/take your pick". To quote Robert Heinlein "TANSTAAFL" (There ain't no such thing as as free lunch)....

 

[appleguru]

Tax should be flat for all vehicles and based on GVWR and mileage driven.

Most states already do an annual safety/emissions inspection and collect mileage, so just assess and collect the tax then.

If you want to incentivize EVs, at the same time, that’s ok too... just add a scaler for the tax based on EPA rated fuel economy.

To add to this, they already have and publish all the data they need in one place!

Data on Cars used for Testing Fuel Economy | US EPA

 

[OTARon]

BLUF: I am a Grammar nerd -- the kid the jocks beat up in school so I would help them with their English assignments. I am not a mathematician by any measure. I need help fighting a state senate bill calling for an EV tax. My argument is that if EVs are to be taxed, it should be at a rate consistent with fuel tax rates, but taking into regard the equivalent MPG.

In Arkansas, the current fuel tax is .215 per gallon. If my 85D gets about 110 MPG equivalent, and I, say, 'fuel up' every night for an hour or two, and it costs me .07 cents per kilowatt hour, what would be an equivalent amount of 'gasoline?' What would be the equivalent tax burden?

I'm writing my state senator to vote against the bill in favor of a more favorable/fair assessment. Is there any one out there who can figure this out?

In WA we are charged $150 extra a year on our tags for a EV (have a 500e waiting on my TMS90D) when we got our car tab renewal bill the 2nd year we were surprised to see the extra $150. But we had drove 12k +/- miles that year and figured (12,000/30mpg=400gal x.65 taxes)= $260 gas taxes would have been paid but we only paid 150 for our 500e. So it was a win for us! Yes if your taxes are only .21 and they are charging you MUCH more than $84 than you are being over charged. IMO

 

[SSedan]

I get just talking state tax since state is collecting registration but let's be honest and ICE are paying Federal fuel tax and most who have gotten a Tesla not only are skipping out on that but got Federal tax credits for buying the car.

Whining about having to contribute to road taxes is one of those reasons the few people who find EVs off-putting find them off-putting, well I suppose it is really the drivers........