EV tax in North Carolina

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PV1

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Per PlugInsights, North Carolina has placed a $100 / year tax on EVs to make up for the loss of gas taxes for roads. This affects pure electrics, but not PHEVs like the Volt.

I'm not sure if I object to this or not, but it's definitely too early to be doing this. Why does it seem North Carolina is fighting EVs and (I'll use the word not to be spoken) 'sustainable' practices much more than any other state? They've removed anything sustainable from their print, effectively banning the word, they're fighting to ban Tesla (Ohio is following suit on that one), and now they're adding EV taxes. I understand that we should pay for the roads we drive on, but it's too early and there is too much money going to the oil industry in direct government spending that could be redirected to the roads to be taxing a handful of drivers.
 
The State of Washington has a similar EV tax, and Virginia and others have considered proposals for one.
http://gas2.org/2012/02/17/washington-state-passes-100-ev-tax/
http://www.businessweek.com/article...car-owners-get-taxed-for-not-paying-gas-taxes

Pennsylvania has an alternate fuel tax schedule, but relies on voluntary reporting.
http://www.portal.state.pa.us/porta.../alternative_fuels_tax/14435/tax_rates/593722

Indiana has excise taxes on fuel, plus gasoline and diesel sales are also subject to sales tax, IIRC. State by state details can be found here:
http://www.api.org/oil-and-natural-...Files/Statistics/StateMotorFuel_OnePagers.pdf


I think several points should be considered, and organized input into the legislative process should be pursued in each state.

1. Every user of the roads in the past has helped pay for them through excise taxes on gasoline and diesel fuel. Only very recently has technology brought alternate-fuel vehicles on the road. It is reasonable that drivers using electricity, CNG, LNG, biodiesel, etc. pay their fair share. There is already some public backlash of EV subsidies and tax rebates, and it is counterproductive to claim special status for road maintenance.

2. No one likes taxes, especially increased taxes, and almost everyone wants an equitable tax system. When all drivers used petroleum-based products, this was simple. Now that technology has produced a variety of drivetrain options and fuel or power sources, the system is becoming more complex. There are both Federal and State taxes on fuel, but given the US average state gasoline excise tax of $0.21/gal (January 2014-- http://www.api.org/oil-and-natural-gas-overview/industry-economics/fuel-taxes/gasoline-tax ) and an average 15,000 miles per year at a CAFE average of about 27mpg, the average driver uses about 550 gallons per year and pays about $116 USD per year in state taxes. A Toyota Prius driver will pay about 40% less, as will people who put less miles on their car.

3.One major difference is that North Carolina and Washington are requiring the driver to pay in one lump sum, as opposed to a few dollars each week or two. That's more painful. It also doesn't tax vehicles like Honda's Civic NG which uses neither electricity nor gasoline/diesel. If the $100/yr fee is reasonable, perhaps all registered vehicle owners should be required to pay it rather than a fuel excise tax. Eliminate the state excise tax on gasoline, and then tax all registered vehicles at the same annual rate. Will PHEVs be taxed as electrics (the majority of miles driven), with fuel taxes, or suffer double taxation?

4. Further, not every state funds road maintenance in the same way. State fuel taxes generally only account for about a quarter of the total funds, though federal fuel taxes funneled back to the states make big contributions as well.. Here's the comparison between Oregon and Illinois:
http://www.thetransportpolitic.com/wp-content/uploads/2010/06/State-Funding.jpg

5. Other options include replacing the fuel tax with a tax based on vehicle weight, or miles travelled (requiring state inspection or tracking), a combination of these two, a tax on tires (may dissuade the poor from purchasing new tires when needed), or a general rather than excise tax (99+% of American households own vehicles, and the public welfare is promoted the commerce over well-maintained roads).
 
Colorado is putting a 50$ EV tax in place this year. The nice thing about their plan is that 30$ goes to highway funds, and the other 20$ go into a fund to add EV infrastructure such as charging stations. Here is an article:

http://www.greencarreports.com/news/1084155_why-electric-car-owners-should-be-happy-for-new-colorado-tax

Kevin
 
Thanks, Kevin. The comments are always the most interesting part of articles on tax policy: Lots of unintended consequences can be foreseen. With so many European members on the forum, it would be interesting to hear how road maintenance revenue is collected elsewhere, and if EVs on the other side of the pond are subject to any special taxes while receiving special benefits.
 
Mart said:
I think several points should be considered, and organized input into the legislative process should be pursued in each state.

1. Every user of the roads in the past has helped pay for them through excise taxes on gasoline and diesel fuel. Only very recently has technology brought alternate-fuel vehicles on the road. It is reasonable that drivers using electricity, CNG, LNG, biodiesel, etc. pay their fair share. There is already some public backlash of EV subsidies and tax rebates, and it is counterproductive to claim special status for road maintenance.

2. No one likes taxes, especially increased taxes, and almost everyone wants an equitable tax system. When all drivers used petroleum-based products, this was simple. Now that technology has produced a variety of drivetrain options and fuel or power sources, the system is becoming more complex. There are both Federal and State taxes on fuel, but given the US average state gasoline excise tax of $0.21/gal (January 2014-- http://www.api.org/oil-and-natural-gas-overview/industry-economics/fuel-taxes/gasoline-tax ) and an average 15,000 miles per year at a CAFE average of about 27mpg, the average driver uses about 550 gallons per year and pays about $116 USD per year in state taxes. A Toyota Prius driver will pay about 40% less, as will people who put less miles on their car.

3.One major difference is that North Carolina and Washington are requiring the driver to pay in one lump sum, as opposed to a few dollars each week or two. That's more painful. It also doesn't tax vehicles like Honda's Civic NG which uses neither electricity nor gasoline/diesel. If the $100/yr fee is reasonable, perhaps all registered vehicle owners should be required to pay it rather than a fuel excise tax. Eliminate the state excise tax on gasoline, and then tax all registered vehicles at the same annual rate. Will PHEVs be taxed as electrics (the majority of miles driven), with fuel taxes, or suffer double taxation?

4. Further, not every state funds road maintenance in the same way. State fuel taxes generally only account for about a quarter of the total funds, though federal fuel taxes funneled back to the states make big contributions as well.. Here's the comparison between Oregon and Illinois:
http://www.thetransportpolitic.com/wp-content/uploads/2010/06/State-Funding.jpg

5. Other options include replacing the fuel tax with a tax based on vehicle weight, or miles travelled (requiring state inspection or tracking), a combination of these two, a tax on tires (may dissuade the poor from purchasing new tires when needed), or a general rather than excise tax (99+% of American households own vehicles, and the public welfare is promoted the commerce over well-maintained roads).
Very insightful - I agree with most everything

EV users should pay their fair share and we need an equitable way to make that happen. I especially like your last proposal, with taxes based on vehicle weight as there is not doubt in my mind that if we didn't have 75,000 pound trucks on the roads, those roads would last 20X longer

But, how do you combine both weight and the miles traveled to come up with a fair tax - You certainly can't just charge every vehicle a flat amount like North Carolina has decided to do for EV's and call it fair. An EV driver who drives his/her car twice as many miles as another EV driver should pay twice the tax and it doesn't appear North Carolina has any provision for that. Gas taxes are 'pay as you use' so the more you drive, the more you pay. It's not right at all to single out EV drivers for a flat rate of $100 per year based on what they would get when compared to an 'average' ICE car

Hopefully, that short sighted law will be overturned in the near future and replaced with something a little better thought out . . . . which also includes PHEV's and CNG vehicles

Don
 
Mart said:
Pennsylvania has an alternate fuel tax schedule, but relies on voluntary reporting.
http://www.portal.state.pa.us/porta.../alternative_fuels_tax/14435/tax_rates/593722
Thanks Mart for sharing this ... I live in PA and was unaware of this. We drove roughly 8000 miles in 2013 in our iMiev, which by some rough calculation (using 220 wh/mile [a guess]) is just over $16 ... much better than a flat fee for sure, and loads better than the equivalent gasoline tax at $83 (assuming 30mpg).

Now I have to figure out where to put it on my tax return ...
 
Don,

Oregon seems to be leading the charge for taxation based on mileage. Avoiding a "surveillance state" system is high on the priority list.
http://www.economist.com/news/unite...ven-not-petrol-burned-will-it-work-roads-less

Your point on heavy trucks is well taken. Diesel is taxed at a higher rate, at least on the federal level, primarily due to the fact that heavier truck which cause more damage use diesel. Of course that's a disincentive for VW TDI users and others who say diesel is a better option for light duty vehicles. The fact that semis only average 6 mpg also increases their burden. There seems to be quite a move towards LNG for OTR drivers in the works, however. Perhaps registration fees based on weight, coupled with use fees based on distance travelled? This might promote lighter weight vehicles using more aluminum and CFRP, increasing efficiency for ICE, Hybrids, and BEVs.

Removing the excise tax on fuel may delay implementation of alternate fuels by making gasoline and diesel cheaper per gallon. (Electric drive is still cheaper in the long run, but the majority of humans are incredibly driven to quick rewards.)
http://en.wikipedia.org/wiki/Stanford_marshmallow_experiment
The Stanford marshmallow experiment[1] refers to a series of studies on delayed gratification in the late 1960s and early 1970s led by psychologist Walter Mischel, then a professor at Stanford University. In these studies, a child was offered a choice between one small reward (sometimes a marshmallow, but often a cookie or a pretzel, etc.) provided immediately or two small rewards if he or she waited until the experimenter returned (after an absence of approximately 15 minutes). In follow-up studies, the researchers found that children who were able to wait longer for the preferred rewards tended to have better life outcomes, as measured by SAT scores,[2] educational attainment,[3] body mass index (BMI)[4] and other life measures.[5] However, recent work calls into question whether self-control, as opposed to strategic reasoning, determines children's behavior.[6]

Fortunately for those of us in Mississippi, electric vehicles will likely be tax free in use until after the issue is settled elsewhere. As Mark Twain noted, "If the world comes to an end, I want to be in Cincinnati. Everything comes there ten years later."
 
Maybe the fairest system would be an annual state registration fee based on a vehicle's value combined with a road use fee based on weight, the number of wheels, and the distance driven. Many states have annual inspections during which the mileage is recorded. The distance driven since the last inspection times a weight factor divided by the number of wheels would determine the annual road use fee. With this in place, the state fuel tax could be eliminated. Being a fee based on usage rather than a tax might make this more palatable to the anti-tax crowd.
 
Sounds workable. The biggest drawback being that a single annual tax bill is felt more severely than being nickeled and dimed week-to-week. Eliminating the excise tax will bring immediate gratification and praise, until the day of reckoning comes at tag renewal, emissions check, or mechanical inspection time.
 
Hi, Here in New Zealand, we have RUC or Road User Tax, and this is applied to nearly all vehicles that use the road, and do not use already taxed fuel.

Petrol here is about the only taxed at pump, fuel with Diesel being popular for many cars as it is not taxed at the pump, but instead a per Km fee based on the car's max allowable weight, though recently this was change so that the smaller cars are now paying the same as a 3 tonne vehicle.

The current rate is about 5 cents per Km.

For electric cars, we were going to have no RUC until 2013, then when there seemed few electric cars on the roads, this was extended to 2020. This is the only rebate we get as such for electric cars, no donations towards public chargeing or car purchases.

The RUC is pre paid and usually in amounts of 1, 000 kms, we usually get 5 to 10, 000 kms on our Diesel Hiluxs each time. You get a printed card that goes on the windshield in a wee holder, so that the police and parking people can see if you are up to date with the RUC.


In this way we pay for the road repairs, though I believe that the amount is in fact simply put into the Government general use account instead of roading, but I am not sure, as every so often there is some comment in the paper about the roads not being maintained out of the RUC.

This works well for most cars, and for commercial vehicles where the buying of RUC all the time could be a pain, there is a e-road gps thing that automatically bills the RUC to your account. It also works out if you are off road say on a farm, and doesn't charge you for off road usage, though I would imagine there would be a few problems where the farm road is alongside the public road and with GPS errors it counts it as on road useage.

There is also the privacy point of being gps tracked that a lot of people are not accepting.

But some comprimise with say a digital distance recorder and no gps, sending electronically to an invoicing system would work just as well.


In reality though, most of the damage to roads are done by turning trucks, one only needs to look at any truck firm driveway / road intersection to see this.

But as long as pricing reflects this, it is not a bad idea. Ideally, trucks should be built so that the weight on the tyre/ road interface is not a lot more than the weight on the cars / road interface and that would solve a lot of road damage.

I think RUC, a simple ticket that can be brought when you get your fuel or for electric cars, when you use a public charge point or via internet like we can here for our diesel cars, that would be the solution.


We still haven't got our iMIEV : ( but have got our second Prius ordered : )
 
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