PA set to enact new EV road use tax

[Yossarian]

The Commonwealth of PA is already one of less EV friendly states and looks set to bolster that status when the new road-use tax becomes law. The road use tax was proposed earlier in the year and was passed in the PA Senate, has now cleared the House Transportation committee and is set to be sent to the full House for approval shortly. I think it's safe to say that it is a less than ideal piece of legislation.

The issue for me is not the road-use tax per se: fuel taxes are a substantial part of funding road maintenance, and EV's should certainly contribute their fair share. It's the magnitude of the proposed tax, $290 per year, that it is an annual assessment due as lump sum, and is in addition to the existing $175 EV registration fee that make it objectionable.

PA is already one of more backward states with respect to EV adoption and use, and the bill as proposed simply exacerbates that. Direct vehicle sales (except for Tesla) are not allowed in the Commonwealth, something that does not merely make purchasing more difficult, but also hinders servicing EVs from new manufacturers like Rivian (an aside: it's also very shortsighted as it sends both jobs and revenue to neighboring states.) There is also little state support for building and improving the charging infrastructure, and essentially no state tax benefits available for EV (or solar for that matter) purchases. PA is a laggard with resepct to EV adoption, and the proposed new tax seems certain to help to discourage potential new owners.

A cynic might well say that is a feature of the new tax, not a bug.


How much is too much? Pennsylvania House negotiating road-use fee for electric vehicles
Peter Hall
Pennsylvania Capital-Star
December 11, 2023 5:10 pm


Electric vehicle owners would join motorists who own gas-powered vehicles in paying to maintain Pennsylvania’s roads and bridges through a yearly flat fee under legislation being considered this week in the state House.

The details of the fee are being negotiated amid concerns about fairness and the sticker shock that could come with an additional cost for owning an electric vehicle.

“This is not the right bill currently,” Transportation Committee Chairperson Ed Neilson (D-Philadelphia) said, adding that the proposed $290 annual fee is only one of his objections.

“If this bill passes and becomes law we will be the highest in the country. We want to make sure that this legislation is done fairly,” Neilson said.

The Transportation Committee passed the bill nonetheless with a 22-3 vote Monday, sending it to the full House, where Neilson said he hopes to pass an amendment with a smaller fee and other changes such as phasing in the fee over a number of years.

The state Senate passed the legislation in June with a 41-9 vote.

Pennsylvania motorists pay about 61 cents per gallon of gasoline and about 79 cents per gallon of diesel fuel for cars and light trucks. That money is used to pay for highway maintenance.

Electric vehicle owners are supposed to pay an alternative fuel tax based on the tax on an equivalent amount of gasoline. The reality is that few electric vehicle owners pay the tax or even know that they’re supposed to pay, the bill’s prime sponsor, state Sen. Greg Rothman (R-Cumberland), said in a memo seeking cosponsors.

There were 47,440 electric vehicles registered in Pennsylvania in 2022, according to the U.S. Department of Energy. The commonwealth has the 13th-most electric vehicles, compared with more than 900,000 in California, the No. 1 state for EVs.

Other states have taken differing approaches to collecting money for road maintenance from electric vehicle users. Twenty-nine states have an additional registration cost for electric vehicles ranging from $50 in Ohio to $200 in several states, according to the nonprofit tax policy group Tax Foundation.

The proposed electric vehicle fee would replace the alternative fuels tax on electricity, but only for electricity used to charge a vehicle at the owner’s legal residence. The bill would also forgive any unpaid alternative fuel tax owed prior to the new fee taking effect.

Neilson proposed several amendments to the bill that would reduce the annual fee to $200 or $225 and phase it in over three years to five years. Neilson’s amendments also contain a provision for plug-in hybrid vehicles, which use a combination of electricity from the grid and a gasoline engine.

He said he did not hold a vote on the amendments in order to allow negotiations between House Democratic and Senate GOP leaders to continue.

A number of environmental and consumer groups and electric vehicle manufacturers such as Tesla and Rivian have opposed the fee legislation, calling it punitive for electric car owners.

Rob Altenburg, senior director for energy and climate at PennFuture, said a $225 electric vehicle fee would be the highest in the nation. An analysis by Consumer Reports found the highest justifiable fee for Pennsylvania would be $190.

Phasing in the fee over a number of years could avoid a negative impact on electric vehicle adoption but it would not address the issue of equity. A flat fee, Altenburg said, would effectively be a larger tax for those who drive less.

A solution, Altenburg added, could be to use a combination of a fee when registering an electric vehicle and a tax on electricity at public charging stations. That way the tax on driving an electric vehicle would be related to the number of miles driven and Pennsylvania would capture revenue from out-of-state drivers as it does with the gas tax.

Neilson said he hopes to introduce an amendment to the bill Tuesday and it could be up for final passage Wednesday.

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[KBabione]

Agreed - Stupid PA. If I carry a small Honda generator in the back of my R1S would I qualify as a hybrid?

Anyway, thanks for letting us PA residents know.

 

[Zoidz]

...
The issue for me is not the road-use tax per se: fuel taxes are a substantial part of funding road maintenance, and EV's should certainly contribute their fair share. It's the magnitude of the proposed tax, $290 per year, that it is an annual assessment due as lump sum, and is in addition to the existing $175 EV registration fee that make it objectionable.
...

"existing $175 EV registration fee"

What are you referring to? There is no EV registration fee in Pennsylvania at this time. Are you referring to the standard vehicle registration fee that all vehicles pay, ICE or EV?

Pennyslvania is goofy in the sense that the R1S is classified as a "Station Wagon" and pays the basic car fee $45, whereas the R1T is a "Truck" and pays the registration fee in the truck classes, which I think the Rivian is Class 3, 7000+ lbs, and is about $200 a year.

Either way, I have no problem paying a new EV tax to replace the lost fuel tax we pay on gas. Some will win, some will lose if they do a flat tax based on average mileage. The person driving 3,000 miles a year gets screwed, the person driving 25k miles a year comes out ahead.

By the way, did you know that we are supposed to be remitting "Alternative Fuel Tax" every month to the state based on our EV mileage? Nobody does, this is why they are changing it.

 

[RWerksman]

FFS

 

[Milermore]

The issue for me is not the road-use tax per se: fuel taxes are a substantial part of funding road maintenance, and EV's should certainly contribute their fair share. It's the magnitude of the proposed tax, $290 per year, that it is an annual assessment due as lump sum, and is in addition to the existing $175 EV registration fee that make it objectionable.

Current gasoline taxes are the closest thing we have to usage-based taxes. Changing that to an annual fee to each EV is a step in the wrong direction. It taxes some owners more than they would pay as an ICE owner and other owners less than their "fair share". Also people who own two EVs and drive a limited amount will pay more in tax than if they drove two ICE vehicles the same limited amount.
Other than requiring mileage reporting, either voluntarily or through monitoring, I don't know how to get around that inequity. Maybe taxing all vehicles a flat fee is an answer - but based on past government behavior (across all party lines) it will raise everyone's taxes over time, guaranteed.
It is not the right choice to tax EV owners just because they own an EV, though.

 

[R1Thor]

"existing $175 EV registration fee"

What are you referring to? There is no EV registration fee in Pennsylvania at this time. Are you referring to the standard vehicle registration fee that all vehicles pay, ICE or EV?

Pennyslvania is goofy in the sense that the R1S is classified as a "Station Wagon" and pays the basic car fee $45, whereas the R1T is a "Truck" and pays the registration fee in the truck classes, which I think the Rivian is Class 3, 7000+ lbs, and is about $200 a year.

Yes, I'd also like clarification on this. I paid my registration fee, and then had the vehicle inspected, so I had to pay that silly sticker... that's...it.

 

[KBabione]

PA is already one of more backward states with respect to EV adoption and use, and the bill as proposed simply exacerbates that. Direct vehicle sales (except for Tesla) are not allowed in the Commonwealth, something that does not merely make purchasing more difficult, but also hinders servicing EVs from new manufacturers like Rivian (an aside: it's also very shortsighted as it sends both jobs and revenue to neighboring states.) There is also little state support for building and improving the charging infrastructure, and essentially no state tax benefits available for EV (or solar for that matter) purchases. PA is a laggard with resepct to EV adoption, and the proposed new tax seems certain to help to discourage potential new owners.

I guess that until this changes and the Commonwealth allows Rivian to sell directly we'll not see any service centers here. It wouldn't make sense for Rivian to invest in an SC that can't be used to deliver cars to residents. Come on PA - I can finally buy beer and wine at Sheetz or Turkey Hill...Let me buy my Rivian in the state too!

 

[R1Thor]

I guess that until this changes and the Commonwealth allows Rivian to sell directly we'll not see any service centers here. It wouldn't make sense for Rivian to invest in an SC that can't be used to deliver cars to residents. Come on PA - I can finally buy beer and wine at Sheetz or Turkey Hill...Let me buy my Rivian in the state too!

Right, but buying alcohol at the gas station is pretty par for the course for PA. I'm just surprised we don't currently sell ammunition and handguns the next aisle over.

We have too many OPEC-loving Republicans in our state house and senate...
Everything (at least from a media stance; who knows what's really going on behind the scenes) I've seen come out of the governors office is to push for more 'green' initiatives, so until we convince our local representatives we want EVs, it's going to be an uphill battle.

I hope I'm wrong. But from my perspective, the people resisting the hardest are the people who feel 'threatened' by EVs for whatever reason...

 

[zefram47]

If their claim of $0.61/gal for tax is valid and it all goes to highway maintenance, it's slightly justifiable. If you assume 15k miles as an average for a driver that's around 428 gallons of gas at 35 mpg (still high for an avg of what's on the road today) then you get $260 worth of road use tax. That said, some folks will drive far less and some far more...this sort of thing does nothing to address that. Also, I don't know about others, but many of us drive in other states and those states won't get any of the fees/taxes collected unless DCFC starts charging use taxes. But when you start talking about it that way, you quickly get to the unsavory notion of tracking actual miles driven. The simple way is reporting odometer data annually, but that still doesn't satisfy the "other state" problem. For that you'd need GPS tracking/reporting...which literally *no one* wants to see.

 

[R1Thor]

Here's where I feel heartburn:

They are taking, but giving nothing back. Far be it for incentives to go green and improve our world and all of that--and there are arguments on either side; I get it. I don't pretend to be 'special' and am not insisting that I would like to shirk responsibility to contribute to road infrastructure (although any of us on here right now could VERY WELL argue for the fact that our tax dollars are not EFFECTIVELY maintaining our roadways...).

But at the very least, if you want to acknowledge that we owe money for the privilege to operate on those roadways, at the very LEAST, allow Direct-to-Consumer Automotive business models to operate in the state so that Rivian can start establishing service centers and show rooms.

Why is that too much to ask? How do we put together some type of petition or mass-effort to start spamming our local representatives' offices with letters telling them to un-stupefy themselves?

 

[Zoidz]

Here's where I feel heartburn:

They are taking, but giving nothing back. Far be it for incentives to go green and improve our world and all of that--and there are arguments on either side; I get it. I don't pretend to be 'special' and am not insisting that I would like to shirk responsibility to contribute to road infrastructure (although any of us on here right now could VERY WELL argue for the fact that our tax dollars are not EFFECTIVELY maintaining our roadways...).

But at the very least, if you want to acknowledge that we owe money for the privilege to operate on those roadways, at the very LEAST, allow Direct-to-Consumer Automotive business models to operate in the state so that Rivian can start establishing service centers and show rooms.

Why is that too much to ask? How do we put together some type of petition or mass-effort to start spamming our local representatives' offices with letters telling them to un-stupefy themselves?

I have written emails to mutliple PA politicians multiple times about the Rivian Service Center embargo. Not. One. Response.

 

[R1Thor]

I have written emails to mutliple PA politicians multiple times about the Rivian Service Center embargo. Not. One. Response.

I'm actually surprised you got no response.

I've not sent any correspondence in this regard, but every other topic I've been passionate enough about to send letters normally resulted in (what was obviously an aide's) responses that were generic and tried pushing other agendas of the politician in question.

A waste of my time for sure, and most of the time both tone deaf and missing the point entirely, and then I end up on their distribution lists to put up with all of their campaigning nonsense ad infinitum!!

My favorite are the ones I get purporting a nauseating amount of support for Veterans...
I'm a Veteran--they're not supporting me in any meaningful way by ignoring me, right?

 

[camaroz1985]

Knew it would happen sooner or later, and have no problem paying my share. As many have said though this isn't a great approach to replace gas tax because it doesn't equate to a use tax. Unfortunately (?) we have two EVs, so we will be hit pretty hard by this, but I guess we drive about 12-15k miles per year in each so it will be about "fair".

 

[Yossarian]

Update: My bad on the $175 EV registration fee. I was going from memory on that (never a reliable source . . . ) and must have gotten it mentally mixed up with something I read on the topic. I'll stand by all of the other stuff. I'm a proud Pennsylvanian but we are really a backward state when it come to some things.

I too have written to my legislators regarding the Commonwealth's prohibition on direct-to- consumer vehicle sales, emphasizing that it's costing us jobs and revenue. The response I got was, unsurprisingly, a form letter. I have not gotten responses "purporting a nauseating amount of support for Veterans." I can however confirm that I have gotten precisely the same level of being completely ignored as has been extended to fellow veteran @R1Thor . . .

 

[Zoidz]

I'm actually surprised you got no response.

I've not sent any correspondence in this regard, but every other topic I've been passionate enough about to send letters normally resulted in (what was obviously an aide's) responses that were generic and tried pushing other agendas of the politician in question.

A waste of my time for sure, and most of the time both tone deaf and missing the point entirely, and then I end up on their distribution lists to put up with all of their campaigning nonsense ad infinitum!!

My favorite are the ones I get purporting a nauseating amount of support for Veterans...
I'm a Veteran--they're not supporting me in any meaningful way by ignoring me, right?

I should clarify. From the reps that serve my local district, I did get the coutesy form letter replies, but I don't consider that a reply because I know how it works. One of my daughters interned for a US Senator. She responded with a thank you, pre-worded form letter, and entered it into a categorization database. If enough letters came in on topic, it got in front of an aid to the senator, who then decided if the senator should be made aware of the letters and the issue.

I also wrote twice to the chairs of the "Professional Licensure Committee" where a bill to open up EV sales has been "In Committee" for two years. I got no response whatsoever from them.

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