Arizona Considers EV Tax

February 8, 2012

Alongside California, Arizona is another state traditionally recognized as one the leading advocates of alternative fuel vehicles. Yet, thanks to some recent developments, notably the Governor’s Regulatory Review Council Vote to remove the state’s clean vehicle laws and replace them with looser federal guidelines, perhaps that perception is changing.

In addition, the state is also proposing a tax for electric vehicles, which would require owners to pay 1.43 cents for each mile driven.

The proposed requirement, under Arizona House Bill 2257 introduced by Rep. Steve Farley, is designed to mirror the current gasoline tax, meaning that money accumulated from the pay per mile scheme would be place in a fund designed to maintain the state’s roadway infrastructure. The Arizona EV tax is modeled after similar legislation already extant in Oregon.

“One of the only ways we pay for our roadways is through gas tax, so if they’re not paying into the gas tax system we need to find a way of closing that loophole,” declared Farley, during an interview with local media outlet Cronkite News.

Although many electric vehicle owners in Arizona appear to agree with Farley, there are some who feel the tax maybe too much too soon, citing the fact that already high sticker prices on many EVs would likely dissuade more potential buyers, especially if they felt additional taxes would be levied for using the cars too.

Executive director of the Arizona Public Interest Research Group, Diane Brown, said she believes such taxes need to be carefully considered. “Any policy that is accounting for electric vehicles should be incentivizing, not discouraging,” she said.

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  • Anonymous

    while i recognize the need to replace gas tax, this approach is questionable.

    taxes are paid for using electricity. isn’t this double taxing? furthermore, why is only ev subject to distance tax?

  • Fred Flintstone.

    If the government could tax oxygen they would.

  • Joan 1234

    The owners of EVs are already making a big sacrifice for the environment – buying a smaller car that costs a lot more. Let’s cut them a break and not make them pay road taxes. Depending on how their electricity is generated, they are already paying taxes built into the electricity anyway.

  • Charles

    How much did automakers donate to Farley’s campaign fund to make this happen?

  • Bill

    It seems apparent that the cowards in Government see this as an easy “no resistance” tax at this time because there will be little opposition due to few people owning electric cars at this time. If they really need road funds let them raise the tax on gas cars and it would only take a fraction of the 1.43 cents to raise even more money. Electric cars need a free ride for a few years until the numbers and costs of the cars can really jusify them being taxed. It is just too early at this time.

  • AP

    The taxes on electricity do not support the roads, so no, this is not double taxation. Anyway, oil compnies also pay corporate taxes, so it’s no different.

    Actually in Michigan, the state charges tax on gasoline after the federal tax is added to the price, so you pay tax on the tax. That is double taxation.

    Does anybody really think that EV owners should get more special treatment and be able to skirt supporting the roads? We already give $7500 tax credits to them. What more do they want?

    The major issue I see with this is that the government will have to monitor your mileage. That’s too much “Big Brother” for me. And will they just ask you the mileage (so people will lie) or have someone read your odometer (which takes more government employees)?

  • Steve EV

    Eventually this plan may be practical. If the goal is to raise revenue for road repair I would want to see the cost of collecting the fees to be much less than the actual fees collected. Until there are more than 100,000 EVs on the road in Arizona this will be a waste of state funds.

    Also, if this bill is an answer to the potential funding shortfall as drivers purchase more efficient vehicles, like EVs, it leaves a much bigger gap unanswered. Most new vehicles are significantly more fuel efficient and lead to less funding, per mile, from all newer gas and hybrid drivers.

  • JMB

    The majority of gas tax revenues are funneled into other projects unrelated to road and infrastructure maintenance. Admin waste, bike trails, walking trails, etc. The tax on EVs is just another grab to line the pet project pockets. Wake up, say no to this BS.

  • crut100

    Gas prices are sky high now. The revenue genereated today has to be the same or higher than it was 5-8 years ago. Add on the fact that these cars cost more than a typical cars means there is more sales tax on the vehicles which should help with general coffers. To add taxes on a product that we want to encourage growth in does not seem like a very good option. Besides how are you going to monitor actual mileage. And especially, how are you going to monitor mileage that ONLY occurs within the state as AZ would not be eligible to collect a road mileage tax on miles driven in Nevada for example.

  • crut100

    Don’t forget. A state would get sued if they tried to collect tax on miles driven in another state so that makes this MUCH more complicated. Also, what about states that have Toll roads? How would you back those miles out? Last, ultimately charging stations will become normal and EV users will pay tax there.

  • veek

    I agree with AP and JMB, and suggest taxpayers should question why so many “dedicated” taxes like gas taxes (supposedly dedicated to repairing our decaying infrastructure) seem to wind up somewhere in the general coffers.

    Yes, collecting the tax could be a challenge.

    If it goes into infrastructure, then it is a road and use tax. Instead, if this is actually just another general tax, then it is kind of misleading to call it a road tax.

    Any policy that is accounting for electric vehicles should reflect the true costs of operating those vehicles, (including the collective costs of maintaining roads and infrastructure) and not artificially stack the odds in their favor. Fair is fair.