States Seek to Tax Hybrid Owners to Recover Lost Gas Taxes

States Seek to Tax Hybrid Owners to Recover Lost Gas Taxes

While the U.S. government is working hard to increase fuel efficiency from automakers, certain states are now looking to tax those hybrids and electric vehicles to help recover lost gas taxes.

According to inflation-adjustead data from the Institute on Taxation and Economic Policy, state and local gas-tax revenue has declined every year since 2004 with it dropping seven percent to $37.9 billion in 2010. There’s a bit of irony that states are looking to tax hybrid and EV owners that are either paying less or not paying a gas tax at all, while the government is providing tax credits ranging from $2,500 to $7,500 to help boost EV and PHEV sales.

But the bigger issue isn’t that it’s just hybrids and electric vehicles that are decreasing gas-tax revenue: it’s vehicles in general. With the new mandates for better fuel efficiency, automakers are making all their conventional models more fuel efficient, effectively making it that all vehicle owners are paying less gas tax over time. Regardless, states are looking to target just hybrids and EVs, even if some hybrids get worse fuel economy than a conventional vehicle.

In Washington state, electric-car owners this year began paying a $100 annual fee, while in Virginia hybrid and electric vehicle owners are paying $64 a year.

[Source: Automotive News]

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  • Chad Wilson

    Fuel taxes pay for road maintenance. No one gets a free ride. These EVs weigh more than most other cars on the road and do more harm. Maybe the tax should be based on vehicle weight, instead.