North Carolina has joined the growing list of states taxing electric vehicles to make up lost tax revenue. While electric vehicles have a lot to recommend them – lower emissions, tax rebates, fun to drive – the biggest problem with electric vehicles seems to be that they don’t use gasoline, which means they don’t pay gas taxes.
Gas taxes are used to build new road and bridges and repair and maintain old ones, among other things. Infrastructure across the U.S. needs improvement, and the sluggish economy makes it difficult to raise the money for necessary projects. The other problem is that cars that rely on gasoline are getting more and more fuel efficient, thus paying less in gas taxes. The rationale behind a tax specific to electric vehicles is that they use the roads just as much as cars that rely on gasoline, thereby causing the same amount of wear and tear on the roads.
Colorado, Nebraska, Virginia, and Washington tax electric vehicles, and Oregon is considering doing the same. Now North Carolina has joined them, though the tax on hybrid vehicles was rejected by the legislature. The North Carolina legislature set the electric vehicle tax at $100 per year.
According to Wikipedia, the North Carolina state tax on gasoline was $0.379 per gallon as of July 2013. The $100 tax on electric vehicles would recoup the state tax on the equivalent of 263.8 gallons of gas that the owner of the electric vehicle never bought. At an average price of $3.293 per gallon in North Carolina, that 263 gallons costs a gas car driver about $868. Despite the tax, the electric vehicle owner still comes out ahead by not buying gas.
Unfortunately for North Carolina, the tax won’t solve their budgetary woes. With 1600 electric vehicles on the roads there, the $160,000 raised by the electric vehicle tax won’t even put a dent in the $2 billion annual road funding shortfall.