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New Jersey considering electric vehicle tax

States and municipalities are getting creative as they look for ways to raise tax revenues from electric cars. More and more plug-in vehicles are on the roads each year, and as gasoline-engine vehicles become more fuel efficient, there’s simply less fuel tax revenue coming in. New Jersey is considering a tax scheme that will seem more reasonable to some and unfair to others.

The average EV driver would pay over $100 in extra taxes each year.

New Jersey state Sen. James Whelan (D-Atlantic) has sponsored S2531, which, if enacted would charge EVs a fee of 0.00839 cents per mile. For the average EV being driven about 12,000 miles per year, that comes out to $100.68 in tax. That’s higher than what gasoline-powered vehicle drivers are paying. New Jersey’s current state tax is 14.5 cents per gallon. If that car drives 12,000 miles per year and gets an average of 25 miles per gallon, that would come out to $69.60 in taxes per year. Of course, federal taxes increase the overall amount for gasoline-engines, making the gasoline tax fairly close to what electric vehicles would be taxed if the bill becomes law.

Electric vehicles are not specifically named in the S2531 bill, but internal combustion engines are exempted. For now, the bill, “Establishes mileage-based fee on passenger vehicles; exempts passenger vehicles from motor fuels tax.”

New Jersey’s proposal might be more affordable than other states. Michigan, Washington, Oregon, Virginia, Arizona and Texas have proposed or enacted electric vehicle taxes and they vary by how much the EV owner would end up paying. They’re based on fixed fees, mileage charges and other means as governments try to recoup some of the fuel tax revenue lost to EVs.

Oregon government officials are considering a bill that would enact a per-mile tax for plug-in and highly fuel efficient vehicles. Fees would be charged for vehicles that get at least 55 mpg. The fee would be about a cent and a half per mile, coming out to about $230 annually for cars being driven about 15,000 miles per year. Ouch.


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