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Does anyone have concerns that we will be penalized for owing electric cars?

Does anyone have concerns that we will be penalized for owing electric cars?

Since I am retired and my taxable income is low I don't qualify for a tax credit but what does concern me because my car is worth every Penney I paid for it even without out a tax credit. What does concern me is that the government may decide to tax our cars by how many miles are driven. The Government is trying to encourage us to by electric by offering numerous incentives. But what happens if electrics become so popular that the government needs to make up for the loss of taxes charged at the pump. We just had a gas tax increase at the pump in South Carolina and the price of gas is also going up . I have a 7 gallon tank in my new Honda Clarity and I expect that 7 gallon tank last a year. But eventually when people wise up and switch to pure electric or plug in hybrids I think it is almost inevitable for the government to recoup the lost revenue by. charging for miles driven per year. What are your thoughts on this issue?

lilbean | 2 juni 2018

California is already charging a $100 annual fee.

garyjtate | 3 juni 2018

Tennessee charges $100 annual fee.

jerrykham | 3 juni 2018

@Lilbean - The CA $100 fee goes into effect in 2020 and only affects model year 2020 and greater. So far existing owners (still have time to buy!) are exempted. But as to the original poster's point - yes, increasingly EV drivers are being asked to contribute to road maintenance via fees since we don't pay the typical extra tax on gasoline. Some states are up around $200.

Mike83 | 3 juni 2018

There are big incentives like Calif. that gives up to a $4000 incentive for a new EV. Need to check with your income.

lilbean | 3 juni 2018

@jerrykham Wow! That’s great news. I had no idea. Thank you. :)

wiboater4 | 3 juni 2018

Miles driven per year would be a fair way to do it since the more you drive the more road wear etc. I would rather pay that way than have an added fee on Registration every year. They will keep increasing that on us and those who drive less like retired people will get the short end of he stick . The other thing to watch out for is the Electric companies will try to take advantage of this. They will find some excuse to charge more when you charge a car. They already are doing things to Solar customers . The early adopters will come out better than people who wait . But with lower maintenace on the cars and some of the other benefits I think it's a good deal to go Electric now

David N | 3 juni 2018

Cars are not the ones causing damage to roads, it’s the semi trucks that carry all that weight. But regardless, the roads do need to be taken care of, and it does cost a bunch of money to maintain them, but “no”, we will not be “penalized” for driving EV, we’ll just be expected to contribute to road maintainance cost. As it should be.

EVRider | 3 juni 2018

Wouldn’t it be difficult to implement a fee based on miles driven? Who would verify the mileage? Not all states have mandatory annual inspections; we don’t have them here in FL.

dmm1240 | 3 juni 2018

Look my state charges a flat $200 fee for my MX when I renew my tag. I think $100-$125 would be fairer, but I can't quibble about paying taxes to maintain public roads because I drive my EV on them causing my share of wear and tear. I do think charging X cents per mile is too complicated. ICE drivers already pay pretty much per mile because taxes are assessed per gallon of gas. EVs are more complicated because there's no way to assess by the KWh. But why go there? Like I said, unnecessarily complicated.

sosmerc | 3 juni 2018

I am retired now and both my wife and I drive far fewer miles than we used to. I like the idea of being charged for the miles driven and I believe the technology already exists to make this work. Perhaps a bit more difficult if you travel in and out of various states, but I think with gps data recording it is still doable.

Maxxer | 3 juni 2018

it should be charged with the license plate renewal

Tropopause | 3 juni 2018

What a great problem to have- too many EV's on the road! Bring it on.

sosmerc | 3 juni 2018

@EVolution......I agree, an annual fee at time of license plate renewal.....a fee based on your reported mileage.

ragtopday | 3 juni 2018

It is something I have wondered about since I got my first plug in Volt back in 2012. The government gives with one hand and takes with the other. In 2012 Duke energy provided a free level 2 charger with free instillation for 2 years. At the end of the 2 years we had a choice to give back the charger and pay nothing, or we could keep it. If I remember correctly the fee for keeping it was somewhere around $150 to $175, I paid the fee and kept mine. One thing I noticed about the charger was that it had a small antenna. I assume the charger reported back to Duke energy and let them know how much power was being consumed. This seems to be one way the state can determine how much taxes to charge me for and electric vehicle. Unlike the Tesla and other pure electric cars a mileage based tax would be hard to calculate on vehicles with ICE since a plug in also uses gas. But the information the charger sent back to Duke would be the easiest way to determining what the proportion of electricity used to power the car. Which brings up my next question, do all level 2 charges have the ability to report how much electricity is being used to power the car?

This is assuming that the government wants to be fair about how much extra government wants charge us.

I guess it is inevitable that all states will charge some kind of extra but it just seems as if electric car owners should given a credit for the same reason the $7,500 tax credit was granted.

ragtopday | 3 juni 2018

It is something I have wondered about since I got my first plug in Volt back in 2012. The government gives with one hand and takes with the other. In 2012 Duke energy provided a free level 2 charger with free instillation for 2 years. At the end of the 2 years we had a choice to give back the charger and pay nothing, or we could keep it. If I remember correctly the fee for keeping it was somewhere around $150 to $175, I paid the fee and kept mine. One thing I noticed about the charger was that it had a small antenna. I assume the charger reported back to Duke energy and let them know how much power was being consumed. This seems to be one way the state can determine how much taxes to charge me for and electric vehicle. Unlike the Tesla and other pure electric cars a mileage based tax would be hard to calculate on vehicles with ICE since a plug in also uses gas. But the information the charger sent back to Duke would be the easiest way to determining what the proportion of electricity used to power the car. Which brings up my next question, do all level 2 charges have the ability to report how much electricity is being used to power the car?

This is assuming that the government wants to be fair about how much extra government wants charge us.

I guess it is inevitable that all states will charge some kind of extra but it just seems as if electric car owners should given a credit for the same reason the $7,500 tax credit was granted.

johnyi | 3 juni 2018

This describes some of the states with EV fees, and also some miles-based proposals/pilots.

https://www.afdc.energy.gov/bulletins/technology_bulletin_2014_03_10.html

robert.s.bjekich | 3 juni 2018

If you have low taxable income, consider converting traditional IRA's to Roth IRA's. This conversion will create taxable income which can be offset by the Tesla credit. Discuss with your tax advisor.

ragtopday | 3 juni 2018

@ johnyi Thanks for the link

nadurse | 4 juni 2018

Eventually when there are enough EVs on the road to put a sizable dent in tax revenue from gas then yes I assume the government will find a way for them to get theirs. My guess would be a flat rate on your vehicle registration fee.

I wouldnt think of it as getting "penalized" rather, since the current system is built on gas usage, but government catching up with reality. Enjoy not paying the gas tax (or some version of it) while we can!

Kathy Applebaum | 4 juni 2018

I'm all for contributing to the maintenance of the roads I use. Since I don't pay gas taxes any more, there needs to be another method -- through my vehicle registration is fine by me.

Not seeing how this is "penalizing" me for owning an EV. Last year I estimate I paid about $320 in state excise taxes on fuel (not including the fed taxes, sales tax, or tax for dealing with leaking underground gas tanks), and the state wants to charge me $100 instead.

Rocky_H | 4 juni 2018

Sigh. If by "penalized" (exaggerated air quotes), you mean pitching in your fair share for the public property and services you are using, then yes, I'm all for it.

Should_I | 4 juni 2018

I am glad to see so many rational responses here.

I was expecting to see more "the world is out to get us".

We use the roads we should contribute to the upkeep. Yes semis beat up the roads and we all buy the good transported in those semis, so they crying about that is pointless too.

ragtopday | 4 juni 2018

I guess it depends on your definition of fair. NY is the state with the highest gas tax and the worst roads. I live in NY most of my life and had to pay hundreds of dollars to repair my car from damage caused by pot holes. A larger portion of NY's gas tax is used to pay for cleaning up petroleum spills . One thing that really ticks me off is that instead of using the money to repair roads a large portion goes to the MTA. So instead of using the tax for it's intended purpose it is funneled into the MTA to subsidize to cost of subway fairs.

As far as I am concerned I have no guilt with not paying a gas tax unless or until the whole corrupt system is fixed.

-----------------------------------------------------------------------------------------

I copied and pasted this article from the NY Post

New York has highest gas tax in US
By Mary Kay Linge March 18, 2012 | 4:00am
We’re No. 1 — when it comes to the taxes we pay on a gallon of gas.

New York state is tops in terms of fuel taxes this year, according to the American Petroleum Institute, beating out California and Connecticut for the dubious honor.

And drivers in New York City and its suburban counties pay additional levies at the pump, making their gas taxes the highest in the nation.

In New York City, the average $4.04 price of a gallon of regular includes 69 cents’ worth of federal, state and local taxes.

That means when you reach into your wallet after a 20-gallon fill-up, you’re shelling out a whopping $13.80 in taxes.

The bill includes 8 cents in state sales taxes and 16.9 cents in local sales taxes per gallon, some of which is funneled into the MTA’s budget.

The Motor Fuel Excise Tax — 8 cents — goes into the state’s Dedicated Highway and Bridge Trust Fund. The fund was set up to pay for major road repairs, but over the years legislators have regularly hijacked billions to steer to the general fund.

A fraction of a penny a gallon goes to a state fund dedicated to petroleum-spill cleanup and to a fund earmarked for the state’s fuel testing program.

Then there’s the 17.8-cent Petroleum Business Tax.

The federal government grabs another 18.4 cents for every gallon of gas you buy.

The cost of crude oil accounts for about 76 percent of the price we see at the pump, according to the US Energy Information Administration. The oil company keeps about 19 cents of every $4.04 gallon of gas sold, and the refinery makes a little less than 2 cents.

The profit margin for your local service station can also be razor thin. In New York, retailers build in a markup of about 22 cents per gallon.

Overhead, including credit-card processing fees, eats up most of that amount. A gas station typically makes just 3 cents a gallon in profit, said Jeff Lenard of the National Association of Convenience Stores.

“Retailers often lose money on the way up as prices rise,” Lenard said. “Then they make their money on the way down by lowering the retail price slowly and taking a bigger cut.”

Per-gallon breakdown

Where your gas money goes:

Federal tax 18.4¢

State Petroleum Business Tax 17.8¢

State Motor Fuel Excise Tax 8¢

State Petroleum Testing Fee 0.05¢

State Spill tax 0.3¢

State sales tax 8¢

City sales tax in MTA region (4.375%) 16.9¢

TOTAL TAXES: 69.45¢

Refiner 23¢

Delivery 2¢

Gas station 22¢

Oil company $2.88

DTsea | 4 juni 2018

road use tax in lieu of gas tax seems fair and reasonable to me.

Uncle Paul | 4 juni 2018

If road taxes went to roads and their repair I would agree with the fees, however in California most of the road taxes get diverted to other pet projects like rail roads and mass transit.

Most politicians run on a platform of road and other infrastructure repairs, but once elected somehow begin to siphon off all those dollars to kick back projects.

brando | 4 juni 2018

Gasoline taxes have not increased since about 1992 ?

Why don't states just charge sales tax? State could probably use the money, need to repair roads, adds jobs. Oh, I forgot that would help the working class.

Which states charge sales tax on gas ?
3 states charge a simple sales tax on the final purchase. Indiana has the highest rate at 7 percent, followed by Illinois at 6.25 percent, Michigan at 6 percent,

ragtopday | 4 juni 2018

@ Brando Look at the newspaper article I posted, not only does NY charge an eight cent sales tax, they also charge numerous other taxes including the one that ticks me off the most is the MTA (metro sales tax). The MTA tax uses the tax on gasoline to subsidize the cost of subway ride.

I fell in love with the model S when I drove an hour to the closest showroom in Atlanta to take a test drive. If I could afford a Tesla I would buy one but I did the next best thing and bought a Honda Clarity. But regardless of what are able to drive and disregarding politics along with climate issues we are all trying to drive cars that are environmentally and morally responsible cars. One thing that seems to get mentioned on this site is the cost of oil that is paid for with the blood young American men and women the give their lives to keep the oil flowing. So that is the reason I brought up this topic. I wouldn't mind being charged some kind of fee to pay for roads but I am annoyed by the fact that many of us have limited or minimized gas usage (I anticipate my 7 gallon gas tank lasting one year) and as a reward for being responsible citizens we are going to be charged a tax on our electric cars that probably will be diverted for other pet projects and the money will not be used for the repair and maintenance of roads which was the reason the tax was conceived of in the first place

Remnant | 5 juni 2018

@Uncle Paul (June 4, 2018)

<< If road taxes went to roads and their repair I would agree with the fees, however in California most of the road taxes get diverted to other pet projects like rail roads and mass transit. >>

Let's assume, under a regime of democratic surveillance of the legislative process, diversion of funds could be prevented.

Then, we should develop a road usage fee that takes into account only the actual impact of the vehicle on the road maintenance. To be fair, such a fee should be proportional to the potential wear-n-tear the vehicle is likely to cause. The factors to take into account would then be:

(1) Miles driven: the vehicle SW could generate such a number on request, for any desired stretch of time.

(2) Weight of the vehicle, net and loaded. The average could be standardized by brand and model.

(3) Motor wheels torque/friction. This number should be available from the vehicle manufacturer.

wiboater4 | 5 juni 2018

One question on the fee being in the registration. How would you determine what is fair if one person drove 8,000 miles per year and another drove 20,000 miles? They shouldn't both be paying the same.

Rocky_H | 5 juni 2018

@wiboater4, Exactly. And if you drive low miles AND have a fuel efficient car, that effect can be even more. I ran the numbers for our Honda Civic Hybrid, with the gas taxes we pay for the 40mpg and about 12K miles per year. The $400 per year EV fee on our registration is more than the gas tax that our other car would have.

Yodrak. | 5 juni 2018

"What does concern me is that the government may decide to tax our cars by how many miles are driven. ... What are your thoughts on this issue?"

I think it's a good idea to replace the gas tax with a mileage tax, categorized by vehicle type and weight. It could be charged with registration renewal, or perhaps annually in states where registration is renewed every two years or more.

People could be required to report their current odometer reading when their tax payment is due. Various methods could be used to reduce cheating, and many who do try to cheat could ultimately be caught when the vehicle is sold.

Currently in my state there's an annual charge of $75 to be paid each January, independent of registration renewal.

brando | 6 juni 2018

corruption is an ongoing problem in US
fair taxes? politicians work for those that pay for them (campaign money) and not mere citizens

off topic? about politics Nellie McKay interview - interesting thoughts
https://youtu.be/_C9NK6CXoYQ

jerryk | 6 juni 2018

I gave on trying to justify fairness with these mileage based fees when I noticed I paid the same "Delivery fee' to pickup my car at the Fremont Delivery Center (2 miles from factory), as someone in Maine does to pickup their car at a local SC.

Life is not fair, but I smile every time I get in the Tesla.

Yodrak. | 6 juni 2018

"I gave on trying to justify fairness with these mileage based fees when I noticed I paid the same "Delivery fee' to pickup my car at the Fremont Delivery Center (2 miles from factory), as someone in Maine does to pickup their car at a local SC."

No different from any other auto brand. It's a type of charge known as the 'postage stamp rate', where the charge is the same no matter what the distance involved. Which begs the question - how would you feel about your mail (or your internet service) being charged a different price for within your zip code v. within your state v. within you region of the country v. coast to coast? The postage stamp rate concept simplifies things and keeps the overhead costs down.

wmyers | 8 juni 2018

Georgia has an annual fee for electric cars in the $250-350 range. (I don't recall exactly but it's substantial.)

Doublelift | 9 juni 2018

I pay $200 per year EV tax when I renew my plates. Grrr. That is justified by building and maintaining roads. It is easy to pass such a law because EV owners are a small minority without political power. That's why there is no annual fee for ICE vehicles to pay for the significant damage they do to the atmosphere with their pollution. And the typical car pays nowhere near $200 per year in gasoline taxes at the pump, and cars from other states that travel through my state contribute zero to road building/maintenance in my state.

This will mature over the years as there are more EVs and their owners have a louder voice. Don't know where it will end up, but it won't be what we have now.

johnyi | 9 juni 2018

Wow that’s a lot. The typical ICE driver pays more like $100 in local gas taxes for 15k miles (not including federal taxes)

Rocky_H | 11 juni 2018

@Doublelift, Quote: "And the typical car pays nowhere near $200 per year in gasoline taxes at the pump,"

I really highly doubt that. Have you actually done the calculations for your state? I did for mine, and it was definitely over $200, but not as high as the $400 per year EV fee we have.

lilbean | 11 juni 2018

Just noticed the spelling error in the title. Yay me.