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Several States Start New Year by Proposing New EV Taxes

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Chevy has announced the Bolt EV could cost certain consumers only $29,995

Photo: © General Motors

Electric vehicles have gradually been rising in popularity, most recently garnering much attention with the various awards and beginning rollout of the Chevrolet Bolt and the strong pre-order popularity of the Tesla Model 3 (soon to begin deliveries). Both of these all-electric vehicles are being offered for affordable prices, and are to be followed by other long-range, affordable EVs.

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However, that affordability will be muted somewhat in six states: Indiana, Tennessee, South Carolina, New Hampshire, Kansas, and Montana. These states have all proposed new taxes on electric vehicles since the beginning of the year, for one reason: they don’t pay any gas taxes.

Gasoline taxes are typically great sources of transportation revenue, paying to maintain the roads that the cars drive on. As more electric cars enter the market, though, that tax will bring in less and less. So, new fees would offset the loss of that income.

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Of course, electric vehicle advocates have a problem with this. Critics have said that such fees would dissuade potential buyers while penalizing drivers for reducing emissions. For proof, the Sierra Club points to the situation in Georgia, where a $5,000 tax credit for EVs was replaced with a $200 annual fee and sales crashed, falling by 80%. The Sierra Club also pointed out that although these fees are meant to replace gas taxes, the existing gas tax doesn’t cover road maintenance costs anyway.

Other states have been exploring alternatives to this kind of fee, including mileage taxes and registration fees based on vehicle weight.

None of these states have passed the proposed EV fees yet.

News Source: Green Car Reports