While many governments in the U.S. and around the world are using tax breaks, incentives and rebates to spur all-electric and hybrid vehicles purchases, Wisconsin is considering the addition of an annual fee for drivers who choose to drive either a hybrid or an EV.
The Wisconsin Department of Transportation has recently proposed a series of fees and tax increases designed to make-up for a chronic budgetary shortfall. Among the proposed ideas would be to charge an annual $50 fee to anyone who drives either a hybrid or an all-electric vehicle.
The rationale for the fee is that it would compensate for taxes electric car and hybrid owners avoid by not paying more for gasoline, which in turn help to both maintain and construct roads and other infrastructure.
In a state that has long depended on fuel taxes and registration fees to cover 90 percent of its transportation budget, it seems the old model is no longer working. A combination of the growing popularity of high-mileage vehicles, fewer miles being traveled and politicians leery of any tax hikes has Wisconsin at a transportation crossroads.
The proposals are being met with objections though from both environmental and business groups.
“We believe this policy is completely backward. It is taking a sustainable choice and putting a tax on it,” said David Hunt, director of communication for Clean Wisconsin.
Sierra Club of Wisconsin Director Shahla Werner believes that owners of hybrid and electric vehicles should not be required to compensate for increased spending undertaken by the state’s department of transportation.
“It seems like a very divertive tactic trying to blame these few hybrid and electric vehicle owners for the DOT’s transportation problem, when really the problem is their spending,” Werner said.
Werner said there are other solutions to this transportation problem that do not require punitive measures for owning a hybrid or electric car. She suggested building more charging ports for electric cars would allow the state to tax the electricity the cars use and thereby compensate for what their owners are not spending on gasoline taxes.
Automotive dealers have also expressed concern about the impacts associated with the DOT proposals.
“If this goes ahead as proposed it’s going to hurt not only new car dealers but the entire local economy,” says Allen Foster, General Manager of Smart Motors in Madison, the largest Toyota hybrid dealer in the U.S.
If the proposals were to proceed, Wisconsin would join four other states who charge an annual fee to own hybrid and electric cars.
Nebraska, North Carolina, Colorado and Washington all tax electric and hybrid cars, with annual fees ranging from $50-$100 a year. Virginia is the only state to have repealed such a tax so far, with Virginia Gov. Terry McAuliffe signing the bill to delete the fee earlier this year.