Electric car tax passes Senate

The Washington state Senate has passed a bill that would impose additional licenses fees onto electric vehicles. The bill passed the Senate on March 29 and had its first hearing on April 11.

SB 5251 proposes an additional $100 per year vehicle license fee on electric vehicles to help pay for the upkeep of state roads that, to date, electric car owners have not directly contributed toward because they do not use gasoline. The additional tax would be paid each year as part of license renewals.

Traditionally, drivers of gasoline vehicles have paid toward the upkeep of roads through taxes on the gasoline they buy, but since electric cars do not use gasoline the old taxation method doesn’t work. As a result of that and other factors, state gas tax revenues have been falling.

Bill sponsors say that electric vehicles still cause wear and tear on roadways and need to pay their fair share.

If electric car sales rise, even less gasoline would be used and taxed, lowering the level of funds available to keep roads in good order.

One alternative to taxing electric cars at the point of licensing is to introduce pay-as-you-go driving. In a pay-as-you-go system, a tiered system would charge drivers depending on how far they drove and the time of day they drove by utilizing a range of in-car technologies to record the trips made.

Examined as part of a report released last week by the Congressional Budget Office (CBO), pay-as-you-go systems could allow electric car owners to continue to pay less for their road use compared to gasoline vehicles while still benefiting from the lower running costs of electric vehicle ownership. However, the tax would require tracking the movements of each and every car on the road.

State Senator Steve Litzow (R) of Mercer Island voted against the measure.

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