Owners of electric and hybrid vehicles in Texas face higher fees every year under a proposal that would help shore up the state’s road fund, which relies on a decreasing amount of motor fuel taxes.
Electric vehicles would be hit with an additional $200 registration and annual renewal fee, while hybrids, which use a combination of gasoline and electric power, would be taxed an additional $100 for registration and renewal, according to a proposal from state Rep. Ken King, a Panhandle Republican.
Revenue from the proposed fees would go to to the state highway fund which the Texas Comptroller reported had $14.2 billion in revenues during 2019 and expects revenues of $14.6 billion in 2020.
If the bill passes it would take effect Sept. 1, joining a majority number of states with extra fees for electric vehicles. In several states the extra fees for electric vehicles have climbed so high that owners are paying more than they would have paid in gas taxes if they were driving gasoline-fueled vehicles, according to an analysis by the consumer advocacy publishing company Consumer Reports. In some cases, electric vehicle owners are paying four times more than they would have paid in gas taxes.
In Texas, drivers of gas- and diesel-powered vehicles pay a state tax of 20 cents a gallon that supports the highway fund, which is used to maintain state roads. But Texas motor fuel taxes have decreased as vehicles became more fuel efficient and electric vehicles and hybrids became more popular. In fiscal year 2020, which ended in August, Texas collected $3.5 billion in motor fuel taxes, 5.4 percent less than the $3.7 billion in fiscal year 2019.
PUMPING UP REVENUE: Texas, other states look to boost fees on EV’s to fund highway maintenance
Electric vehicles represented 1.8 percent of total U.S. vehicle sales in March 2019, up from 1.6 percent a year earlier, according to electric utility trade association Edison Electric Institute of Washington.
King, who represents a swath of the Panhandle stretching from Oklahoma to New Mexico, also introduced a bill this week that would add a 1 cent tax to every kilowatt hour of energy generated by wind, solar, coal and nuclear power. Power generation from natural gas would be exempt.
King could not be immediately reached for comment.