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North Carolina and Others Looking to Tax EVs and Hybrids

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On: Fri, Jun 21, 2013 at 2:06PM | By: Elizabeth Puckett

North Carolina and Others Looking to Tax EVs and Hybrids

If you drive a hybrid or electric vehicle, prepare to be shocked about new taxes that may affect you in the near future—especially if you drive one of the 30,000 EVs and hybrids in the state of North Carolina!

States around the country are finding it hard to fill the gaps left by lower tax revenues due to declining gas sales. Their solution seems to be targeting people who don’t buy gas at all or who purchase very little of it.

Publicly used roadways and bridges are built and maintained using the money from gas taxes. Fuel tax revenue has been on a downward slide since cars have become more efficient and people are driving far less in this country because the cost of gas is so high.

Taxes on fuel make up almost 40% of all highway revenue at the state level, and almost 90% of federal transportation funding. These revenues have taken a sharp dip of around 41% in value at the federal level, and are failing to keep up with the rising costs associated with construction.

Ten states currently have hybrid and EV taxes or are in the process of implementing a tax on electric vehicles or hybrids to make up for this deficit. The latest is North Carolina where Senators have proposed adding an additional $100 annual registration fee for electric cars and $50 for hybrids. If these provisions stand after budget negotiations, the new taxes are set to raise $1,500,000 yearly for North Carolina roads.

Many alternative energy vehicle drivers and environmental protection groups are stunned by these new taxes. They believe this is the wrong approach to raise funds, and that states considering these EV, so many people deem these taxes to be a fair move. A major concern is that this will deter drivers from buying energy efficient vehicles to avoid these fees.

Policymakers argue that it’s the responsibility of all drivers to help construct and maintain the roads that everyone uses, whether they need to purchase gas or not. Some advocates of the new tax policies suggest a plan where taxation is based on the number of miles residents drive, but that approach would present extensive challenges of its own—and definitely raise major privacy concerns.

The policies currently in place include taxes in form of a yearly fee or one tacked on to the registration fees of hybrids and EVs, while others stand by the idea that everyone needs to contribute to the funds that make the building and upkeep of roads possible.

Do you agree with these new taxes for the sake of public roads, or do you think policymakers need to rethink their plans?


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