#EVTax

Many states and municipalities are all-in on EVs, but the shift has some wondering how they’ll make up for the tax shortfall from falling gasoline sales. A popular solution that gets tossed around is to add a tax to EV registrations to help recoup the lost revenues, and Texas recently passed a new law to remedy the problem.

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.”