Tax Increases Target EV and Hybrid Car Owners

As electric vehicles continue to dominate the automotive space, some lawmakers are seeing this as an opportunity to tax drivers in an effort to help build and maintain roads for drivers of both traditional, hybrid, and fully electric vehicles.

So far, 30 states have some sort of legislation in place requiring electric vehicle and hybrid car owners to pay up additional taxes. Like most other taxes, these new EV taxes are meant to help pay for highway and road maintenance among other automotive-related expenses.

Despite what appears to be a trend that is only growing in popularity across the nation, not everyone is quite on board or fully understands the financial nuances associated with purchasing an EV. One strategy EV drivers can use to offset this cost is tax deduction for car donation. Donate your old car to lower your increased taxes on a new EV.

How Are Additional Fees for EV Drivers Calculated?

Extra fees placed on drivers of electric and hybrid vehicles are being brought down at the state level. These fees are typically assessed annually and are due when drivers register their vehicle. The fees vary by state with some governments handing down more expensive fee structures than others. In a majority of these states, these fees also consider inflation rates and adjust accordingly with the current economy.

There are currently 31 states that have some sort of laws on the books that pertain to EV registration fees. For many of these states, those laws have been in place since 2019 and have since been amended to keep up with inflation rates and the change in the EV landscape.

The fees are targeted and address types of alternative fuel vehicles differently. Plug-in electric vehicles tend to see the highest fees while plug-in hybrids will often see lower fee requirements.

How Much More Can EV and Hybrid Drivers Expect to Pay?

The annual fees vary from state to state with some states charging significantly more than others. States that have some of the highest fees include Georgia which charges $212.78 in annual fees according to the National Conference of State Legislatures.

Alabama also has some of the highest annual fees ranging from $265-$273 for battery electric vehicles and $165-$173 for plug-in hybrid vehicles.

States that have lower fees ranging from $50 annual payments include Colorado, Hawaii, and South Dakota. While these states have some of the lowest fees in the country, they may likely rise due to the inflation and demand of EV and hybrid vehicles.

Some states also take into consideration the weight of a vehicle when determining fees. In Oklahoma, EV fees are tiered based on how heavy the vehicle is. Though there is a standard $110 fee for vehicles under 6,000 lbs.

How Are These Fees Being Allocated?

As the growth of EVs continues, so do the funds collected by state governments through the fee structure. A majority of these fees are funneled into the state’s transportation fund to be used for roadway maintenance and development.

In many states, portions of these funds are also used to build EV infrastructure including charging stations. In Colorado, $20 out of every $50 dollar collected goes towards paying for charging stations in the state.