By on May 19, 2021

Texas lawmakers have presented Senate Bill 1728 as a way to nail electric vehicles for circumventing fuel taxes, sending everyone into a tizzy. Electrification has become about more than simply developing new powertrains under the auspices of environmentalism and it’s observable in this week’s headlines. But let’s discuss what SB 1728 hopes to achieve so that you might make up your own mind without this author’s forthcoming influence.

If passed, the bill would raise fees on EVs as a way to make up for the gas tax they’re not paying. The proposed legislation stipulates an annual fee of between $190 and $240, an additional fee of at least $150 for anyone who drives their car more than 9,000 miles a year, and then 10 bucks per year for the local charging advisory council. The rules would come into effect this September and raise an estimated $37.8 million for the State Highway Fund in 2022. While we cannot say whether that money will be used responsibly, the pretense is that the funds will be used to “[equalize funding for] road use consumption for alternatively fueled vehicles.”

Obviously, this resulted in several automotive groups and media outlets crying foul. CleanTechnica said it was effectively a punishment forcing “Tesla and EV owners” (what’s the distinction here?) to unfairly pay for infrastructure in the name of fairness. Meanwhile, Plug-in America (an EV advocacy group) saw its 2020 research cited as a way to suggest the fees associated with SB 1728 would be out of line with what the average light passenger vehicle pays annually. Of course, none of those gas-powered automobiles received colossal federal rebates — something Plug-in America believes is essential to improve adoption rates.

SB 1728 is sponsored by Republican Senators Charles Schwertner and Robert Nichols, and Democrat Beverly Powell. All of them have predictable ties to industries heavily reliant on petrochemicals. But it’s not like the Green Energy Lobby, which frequently masquerades as environmental advocacy groups, hasn’t been equally insidious of late.

The Tesla Owners Club of Austin has urged locals to contact their local representatives and demand that the bill be struck down, or at least be revised so that the fees are more in line with what it thinks gas-powered vehicles pay in fuel taxes.

Frankly, the latter response seems a fair compromise. But the surrounding discourse remains troubling. Many are claiming that EVs should be exempt from fees specifically because they offer almost miraculous benefits to society. Depending on the person you ask, swapping to electric vehicles will keep people out of hospitals for respiratory illnesses, restore the population of endangered animals, and make you a better person. Emitting greenhouse gasses has effectively become a sin, but only if it’s coming out of the back end of the car you’re driving.

It’s transforming into a moral issue for some and that’s really making it hard to have a serious discussion. My issue with EVs has always been that it costs more to buy one that’s functionally equivalent to an internal combustion vehicle (for now). But it’s silly to dictate what people should and shouldn’t drive when you’re purchase is ultimately going to result in massive levels of pollution regardless.

Would you rather have your car result in the dumping of heavy metals into the ocean, child labor violations, and nearby power plants handling all of your (hopefully lessened) emissions OR would you rather just spew a bunch of greenhouse gasses callously from your own tailpipe? The necessary components are going to be shipped around the globe on massive tanker ships (the number one contributor to air pollution in the world) either way.

Texas, and ultimately the nation, need to find a happy middle ground. Pretending that electric vehicles are going to be the answer to society’s ills doesn’t preclude them from needing to contribute toward supporting roadway infrastructure. But we shouldn’t be hitting them harder than their gasoline or diesel counterparts just because we associate them with the wealthy enjoying government subsidies. The real trick will be figuring out how to manage and balance things as EVs come more commonplace (cheaper). We’re just dreading the likely solution being something like giving the government direct access to your vehicle’s data so it can keep tabs on the odometer and charge you by mile.

We’ve probably got another decade or two before we absolutely must have sound regulatory solutions for electric cars. Let’s not muck it up because we’re in a rush or totally blinded by rhetoric employed by opposing industrial groups.

[Update 5/20/2021: Several people wanted to know what the average Texan pays in fuel taxes annually so I did some quick math. Occupants from the Yee-Haw State pay 38.4 cents in taxes for every gallon of gasoline they buy and 44.4 cents for every gallon for diesel. It’s one of the lowest fuel tax rates in the country (it’s an oil state) and works out to be about $140 per year if they’re driving 9,000 miles in driving a car that gets the national average of 24.9 mpg. Obviously, those with less efficient engines, running a diesel, or racking up more miles are paying extra.]

[Image: Leena Robinson/Shutterstock]

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49 Comments on “Texas Considers Taxing Electric Vehicles...”


  • avatar
    swester

    Wonder how Elon feels now about moving operations to Texas…

  • avatar
    APaGttH

    Texans – YAHOO!

    Texans also not seeing a cost per mile model that if figured out for EVs…

    Hey, Texans love a free-market economy and hate taxes unless…

  • avatar
    Master Baiter

    “…to unfairly pay for infrastructure in the name of fairness…”

    Fairness is an entirely subjective construct; arguments made in its name are barely worthy of a child.

  • avatar
    FreedMike

    “ Would you rather have your car result in the dumping of heavy metals into the ocean, child labor violations…”

    I seem to remember us importing billions of dollars worth of oil from ultra enlightened countries like Saudi Arabia , which seems to be missing from this little morality play, but whatever.

    It makes sense for EV owners to pay their fair share. I approve.

    • 0 avatar
      Lou_BC

      Just Posky’s poorly veiled political ideologies bubbling under the surface.

      It makes sense for EV owners to pay their share but before one says “fair”, how much do Texans contribute to road infrastructure via fuel taxes? That isn’t mentioned.

      • 0 avatar
        Matt Posky

        We don’t need to import oil from Saudi Arabia. We could be energy independent if we had sounder energy policies.

        But yes, the petrodollar frequently results in unacceptable moral conundrums. I just see that as an issue created by geopolitics, rather than our drilling for oil. All of this has a environmental and ethical cost and I always attempt to be realistic about it.

        Texans pay 38.4 cents in taxes for every gallon of gasoline they buy and 44.4 cents for every gallon for diesel. It’s one of the lowest fuel tax rates in the country (it’s an oil state) but still works out to be about $140 per year if they’re driving 9,000 miles and driving a car that gets the national average of 24.9 mpg.

        That’s why I supported a compromise.

        • 0 avatar
          Lou_BC

          Thanks for the update.

          If one looks at geopolitics, the USA or any other major country would be better off by burning oil supplied by other countries. If war break out they then have their own reserves to tap. The military is a massive consumer of fuel.

  • avatar
    Crosley

    If vehicle taxes are about road construction and maintenance, why again do electric vehicles “not” get taxed?

    Taxing gasoline was never about “climate change”, it was simply an easy tax to collect for the people using a government service (roads) to pay for it. A change now seems appropriate.

    And all the other freebies electric cars get need to stop, this was always sold as just getting the tech off the ground. Its here, and its not going anywhere but up.

    Also, allowing electric cars to ride in the HOV lane with only one person needs to end. HOV lanes were about relieving traffic congestion.

    • 0 avatar
      28-Cars-Later

      The Federal gas tax was introduced in 1932 to help balance the budget (wow the days when gov’t tried to balance its budget).

      https://www.thoughtco.com/history-of-the-us-federal-gas-tax-3321598

      In more recent years, transfers from the general fund are required to the highway trust fun in order for it to continue to operate.

      https://www.taxpolicycenter.org/briefing-book/what-highway-trust-fund-and-how-it-financed

      However it must be noted, in 2016 $8 billion was drained from the trust fund to given to [failed] mass transit agencies. This number has only likely gone up.

      https://en.wikipedia.org/wiki/Highway_Trust_Fund

      So as per usual, they are telling you half truths when they imply the “gasoline taxes pay for roads” bit. Spending as usual is the problem here and if they were serious (they aren’t) Congress would amend or repeal the Davis-Bacon act.

      https://www.foundationsoft.com/tips-davis-bacon/

      On the HOV thing, you make a valid point and in fact the **EV** should be the one idling in highway traffic because it doesn’t pollute. But again, the ruling class finds a way for it to circumvent the rules it created for society and abuse the use of infrastructure for other than its intended purpose.

      The smartest move here is to asses a several hundred dollar fee on EV registration and be done with it, do not call it a tax and do not attempt to spend the time/money on calculating a per mile basis tax. I have no doubt they have data on average vehicle usage per year and can extrapolate how much they receive per unit, simply apply this figure to your EV fee. Sure we’ll see the local half truth news interview worthless proles who will complain about whatever random lunacy they’ve been brainwashed with but that’s as far as it would go.

  • avatar
    grein002

    I don’t have an issue with EV drivers “paying their fair share”. However, let’s be clear that this particular law would result in them paying far more than their fair share compared to gas vehicle users. Texas currently has a $0.20 per gallon gas tax. A little back-of-the-envelope math tells me that any EV driver driving over 9000 miles per year would pay $350/year in fees, which is equivalent to the gas tax on 1,750 gallons of gas. Assuming a 25mpg vehicle, this would require over 43,000 miles of driving in a gas vehicle to produce the same revenue as the EV driver who has driven far less. In order to fairly assess fees on EV drivers, the fees should be based on actual miles driven, or at the very least based on average miles driven per year in an average vehicle.

    • 0 avatar
      ajla

      Yea, I think the valid complaint here is that the fee is too high, not that the fee shouldn’t exist at all.

      That said, and I’m not sure how things are in Texas today, but I’m not particularly interested in my state government tracking my mileage so I’d personally prefer a flat fee system.

    • 0 avatar
      brn

      I did the math in MN. The average vehicle pays approx $340 in gas tax every year.

    • 0 avatar
      28-Cars-Later

      There is not such thing as “fair” when it comes to taxation, the political class made up this concept to mindf**k the populace when they want to reach in your pocket deeper. Please recall Justice Marshall: “the power to tax involves the power to destroy.”

      “In order to fairly assess fees on EV drivers, the fees should be based on actual miles driven, or at the very least based on average miles driven per year in an average vehicle.”

      Registration fees are not levied by actual usage, and that is how they will do it. I imagine they will do a calculation as you suggest and that will be the fee.

  • avatar
    bullnuke

    Good. Everyone who plays should pay. A Tesla 3 weights 3,648 to 4,250 lbs. My wife’s Subaru Outback weighs 3,635 to 3,937 lbs – roughly equivalent. Her fuel is taxed at $.569/gallon. and she drives to and from work 60 miles four days a week. Annual mileage is 12,480 divided by her 29.5 average mpg equals 423 gallons purchased @ $.569 of Federal/State tax per gallon for an annual $240.00 in fuel tax. Ohio (my state) charges electric vehicles an annual $200 use tax to attempt to compensate for the loss of revenue – the electric vehicle folks are getting a $40/year break here. “Grass, gas, or a$$ – nobody rides for free”

    • 0 avatar
      28-Cars-Later

      Here in the [not] Great Commonwealth of Pennsylvania registration [tax] is levied by vehicle type and gross weight. They of course don’t care if you use your trailer three times a year, you pay the yearly or in some cases can get a permanent registration (oh and trailers have to be insured separately too).

      You know which vehicles ***do not*** pay these fees? Busses, police, fire, and EMS vehicles. You know who is on the road 24/7 in some cases and causes the most road damage? Yup its busses, police, fire, and EMS vehicles. Funny how that works.

      http://www.dot.state.pa.us/Public/DVSPubsForms/BMV/BMV%20Forms/MV-70S.pdf

  • avatar
    stuart

    Agree that EVs should pay something analogous to a fuel tax. Assuming that fuel taxes are dedicated to road maintenance, it seems fair that heavier vehicles should pay in accordance with the road wear they cause. Here’s a handy chart:

    https://streets.mn/2016/07/07/chart-of-the-day-vehicle-weight-vs-road-damage-levels/

    Since EVs are weighted with heavy batteries, the chart suggests they pay, very roughly, 2X the tax of an “average” car (I’m guessing that’s a Camry).

    If that sounds unfair, consider that the average semi-trailer does about 400X as much road damage as the average car. Do heavy trucks pay 400X as much tax?

    IMHO, road taxes should roughly correspond to the damage caused by a vehicle. Heavy trucks should be paying more, and (maybe) cars should be paying less.

    BTW, I gather that it’s still illegal for Tesla to sell a car to anyone in Texas. That probably has more to do with the proposed EV tax than anything else.

    Of course, I doubt that Texas has any interest in my opinion…

    • 0 avatar
      Arjay

      Every Tesla (and other all-electric cars) kill many children in the Congo who work underground for about a dollar a day, and risk death when the mines collapse.

      What is that worth?

    • 0 avatar
      Arjay

      Every Tesla (and other all-electric cars) kill many children in the Congo who work underground for about a dollar a day, and risk death when the mines collapse.

      What is that worth?

      • 0 avatar
        mcs

        “Every Tesla (and other all-electric cars) kill many children in the Congo”

        Actually, they don’t. When they used cobalt, they didn’t buy it from the Congo. Now the industry is moving away from using cobalt in electrodes. Mostly because of costs.

        If you want to talk about child labor and deaths, what about the colleges and high schools that use unpaid student athletes for profit? You have deaths there too. Just google it and you’ll see.

  • avatar
    SCE to AUX

    “We’re just dreading the likely solution being something like giving the government direct access to your vehicle’s data so it can keep tabs on the odometer and charge you by mile.”

    The government does not need direct access, but in most cases they already know how much you drive. My odometer is reported during the annual safety inspection, and annually to my insurance company.

    As I’ve said here before, fuel taxes should be replaced by an annual tax:
    Tax = GVWR x miles driven

    This way, everyone pays for actual road use.

    As for the Texas proposal, it’s not perfect, but it’s a start toward rethinking how to pay for infrastructure. Protesting such a payment is petty and selfish.

    • 0 avatar
      Art Vandelay

      Why should this tax be tied to actual usage? My property taxes didn’t change when my kids were no longer in school nor did they go down because I live in a neigborhood where you likely only interact with the police if they are writing you a ticket. There are plenty of taxes that have no connection to your individual usage. You still have all your Chinesium junk delevired by Amazon on those roads for example no matter if your car is actually traversing them and if your house catches fire the fire truck will need to traverse a road to come put out the fire.

      Additionally isn’t a higher rate for EV drivers a progressive tax since they tend to be in higher income brackets? I read in a post the other day on this very site that soon driving an ICE car would advertise to the world that you can’t afford a house for example.

      Roads are part of the infrastructure we depend on. People should be paying for them no matter if they actually drive on them. If we are doing taxes based on use of services I am going to be needing a pretty sizable refund for a bunch of items.

      Of course EV drivers should pay for roads. So should every other person living in a community that actually has roads.

      • 0 avatar
        SCE to AUX

        Toll roads, such as the Pennsylvania Turnpike, are 100% funded based upon use.

        So I guess I’m proposing a toll of sorts instead of a tax. Even fuel taxes are loosely based upon use.

        But you are correct – many infrastructure items are paid for by income taxes. Good luck to anyone who wants to change the status quo, however.

      • 0 avatar

        I think you nailed it, Art. Even if one does not drive, or drives few miles, other ‘services’ use the roads for that one person. How a fair cost can be arrived at is possibly the larger issue. As someone mentioned earlier, it can get subjective easily. An objective measure will be somewhat difficult to arrive at, but nonetheless needed to make this work in support of infrastructure support.

  • avatar
    downunder

    They cribbed their tax idea from Victoria and South Australia.

  • avatar
    aja8888

    Good idea! Let those EV drivers pay their share. After all, they did get a $7500 tax credit when they bought the EV (or not).

  • avatar
    dal20402

    “as a way to make up for the gas tax they’re not paying”

    We have one of these fees in Washington, but unfortunately it’s way more than the forgone gas tax, unless you’re assuming that the EV driver is driving 20k+ miles per year. Given that the EV buyers so far are mostly wealthy it’s not too bothersome, but we need something different as new EVs get cheaper and used EVs filter down into lower income brackets. It’s a bit perverse that it cost me $750 to register my Bolt this year, but only $500 or so for my much heavier and more road-damaging Highlander Hybrid.

    • 0 avatar
      APaGttH

      I’m glad Inslee vetoed the electric ar bill – I’m not happy for the logic around the veto but glad he did.

      I wad dead set against it because without a major reduction in the cost of electric vehicles, it would be beyond destructive to the lower income brackets of the state.

    • 0 avatar
      Arjay

      Maybe they are paying for the dead children in the Congo who are forced into the cobalt mines.

  • avatar
    SilverCoupe

    So why not eliminate the gas tax and just tax all vehicles, be they gas or electric, equally?

    • 0 avatar
      Nick_515

      Because that would be good public policy, which requires thoughtful people sitting together and figuring out the best way to govern.

      • 0 avatar
        28-Cars-Later

        I have yet to see that happen in my lifetime. I think its time to be pulling random people off of the street for a term as a politician as that actually might work.

        • 0 avatar
          Snooder

          No.

          Not just no, but hell no.

          I, in my lifetime, have seen plenty of good public policy. You know what good public policy is? It’s fixing the roads. Building good schools. Setting up after school programs. Building public parks. Paying public library staff. You know, all that boring shit. And doing it in a sane, cost effective way that charts a compromise between the extravagant who want to spend ALL the money and the cheapskates who don’t understand the concept of spending now to save more later.

          Generally when I’ve seen shitty public policy it is due to your sort of sentiment. This attitude that government is always bad and politicians are corrupt so we might as well just burn it all.

          The government may not be perfect and politicians have flaws like every other human, but I guarantee that it could indeed be worse. And it shortly will if we start throwing in random douchebags who have no fucking idea what they are doing. You wanna live in some 3rd world country? This is how.

          Hell, most of our current problems are due to the Tea Party managing to get a bunch of said douchebags elected.

      • 0 avatar
        Old_WRX

        Nick_515,

        “Because that would be good public policy, which requires thoughtful people sitting together and figuring out the best way to govern.”

        Isn’t that illegal? :-)

  • avatar
    DenverMike

    Texas oil producers have their stink all over this. Plus it’s a dig at California, CARB and vegans probably.

  • avatar
    DC Bruce

    Of course it’s political. EVs have been political since Day 1 of the modern era. (First generation EVs from 100+ years ago were developed to attract consumers who were repelled by the operational issues of ICEs of the day, not by government mandates.). Supported by an array of direct and indirect subsidies as well as other government coercion, EVs are the toys of the affluent. Eventually, the proles have begun to notice . . . so you can expect more actions like this. Even more when increasing numbers of people are having to turn to the used car market because they can’t afford a new car that meets their needs.

    To be sure, as others’ calculations show, the proposed tax is punitive when compared to the fuel tax paid by ICE car owners. But the idea behind it isn’t going away. In states not controlled by gentry liberals and gentry liberal wannabes, you’ll begin to see more of this, I believe.

  • avatar
    MrIcky

    Tesla Owners Club of Austin. Austin is for people who like the idea of Texas but would never actually live in real Texas.

    This bill itself seems too industry kickback hackish. But they probably have a point that something needs to be done soon to fairly address the issue.

  • avatar
    Dartdude

    One thing that people are forgetting is that EVs will be driving up the cost of electricity for everyone.

  • avatar
    28-Cars-Later

    Drop the additional penalty on mileage at inspection but otherwise go for it Texas.

  • avatar
    pb35

    I live in Austin and I’m all for this. I have 1 NA V8, 1 forced induction V8 and a forced induction V6 in my garage. I’m paying my fair share in gas tax.

    And Tesla Owners Club of Austin? I bet those meetings are a real hoot and a holler.

  • avatar
    28-Cars-Later

    A simple comma makes “Plug-in America” quite the double entendre.

  • avatar
    tane94

    Bravo Texas! Every state should assess a extra an extra fee on electric vehicles for use of public roads.

  • avatar
    Superdessucke

    I don’t see what the issue is here. Everybody keeps saying “tax the rich.” Well, by my observations, most electric car buyers are pretty well healed yes? I’d be curious to see a study on this to confirm that but I’d bet you they make substantially more than the average income in the United States.

    So I guess I just don’t understand what the complaint would be? Seems fair enough to me in light of the current mantra.

    • 0 avatar
      Old_WRX

      The complaint would be that these well heeled people don’t want to pay it. But, of course it would be dressed in a lot of supposed wonderful reasons why they shouldn’t have to pay anything resembling their fair share in road upkeep costs. In short, the usual.

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