Gas tax revenue? Think about it this way: the issue of fuel taxation will not simply disappear with the surge in EV ownership..
Writing on the DMV blog, Jordan Perch put the issue of tax credits and taxation this way:
“Over the past few years, several U.S. states have been providing generous incentives for plug-in vehicles, trying to promote the use of more fuel-efficient, eco-friendly alternatives to conventional vehicles. But, while the tax credits, rebates, and reduced licensing fees have certainly helped accelerate the adoption of electric cars, they have also led to lower fuel revenues, which could threaten the future of the country’s transportation system, given that fuel tax, along with vehicle registration fees, is one of the most significant sources of funds transportation in most states.”
Perch and a majority of observers expect the number of electric and plug-in hybrid vehicles on U.S. roads to increase, causing gas tax declines.
He adds: “As of 2004, state and local gas-tax revenues have been constantly falling for a decade now, and according to the Institute of Taxation and Economic Policy, states have been losing $10 billion annually in transportation revenue because of that.”
A loss in annual revenue of $10 billion is no small matter. Such a dramatic decline will have an adverse impact on infrastructure and maintenance requirements.
He concludes the gas tax is no longer sustainable as it is, and cannot provide sufficient funding for construction and maintenance of roads and bridges across the country.
At present, electric vehicles are exempt from federal and state gas taxes. But a growing number of individuals see this as unfair to those who still own gasoline-powered cars. “This is why a lot of policy-makers have been suggesting that electric cars should also be taxed and pay their fair share of transportation infrastructure construction and maintenance costs.” Perch writes.
To wit: several states have already decided to go this way, thinking that it would be the lesser of two evils – the other being increasing the gas tax.
Today five states are taxing EVs: Colorado, Nebraska, North Carolina, Virginia and Washington. Arizona, Texas and Oregon are expected to soon follow suit.