September 29, 2019
A new tax on electric and hybrid vehicles, similar to one proposed during this year’s Texas legislative session, goes into effect Tuesday in Arkansas.
The law, tacked onto the Arkansas legislature’s highway appropriations bill signed by the governor earlier this year, is intended supplement money paid to the state government by gas-powered vehicles.
Since EVs and hybrids pay less or nothing in fuel taxes among many states but still use the same roads funded by gas-powered vehicles, the trend of adding taxes up to 400% of previous state taxes on EVs is catching on in a number of states.
In Texas, District 88 Rep. Ken King‘s HB 1971 would have put extra electric and hybrid vehicle registration money in the state highway fund, augmenting gasoline taxes for the upkeep of roads.
The trend is to tax EVs more than hybrids because of Hybrid use of gasoline, which is of course already taxed.
In the Texas bill, which died in committee in May, EVs would have a $200 additional tax, hybrids a $100 tax added — just like the new Arkansas law.
Alternative car owners in both states complained that the new tax “feels punitive” as if those interested in new tech are being punished.
While not necessarily true in Texas yet, other states are feeling the effects of diminished highway funds as alternative vehicles gain in popularity — and Rep. King’s bill is likely to see a new day in next year’s legislative session as lawmakers look toward the day when gas taxes fall considerably based on increase mileage among gas-powered vehicles and more EVs and hybrids hit the road.