Bill would assess electric-car mileage fee

TRENTON, N.J. — Drivers who buy an electric car to beat the price of gasoline won’t beat the tax man if one New Jersey lawmaker has his way.

The state senator wants to tax electric cars by the mile to pay for road maintenance. But the proposal has a catch: As it’s written, electric car owners would pay more than if they paid the state’s current set of gas taxes, which total 14.5 cents a gallon.

 

In the bill, S-2531 proposed by Democratic Sen. James Whelan of Atlantic City, N.J., electric and alternative-fueled vehicles would be charged a fee of 0.00839 cents per mile traveled. The bill would apply to all-electric plug-ins, not hybrids.

“Currently in New Jersey, alternate-fueled and electric vehicles don’t pay a gas tax,” Whelan said. “For 98% of the drivers with gas-powered cars, they pay a 14.5 cent-per-gallon tax to support the upkeep of roads. The guy driving an electric car doesn’t pay anything.”

Whelan said his concern is the future, when electric cars become more commonplace and make up a greater percentage of the vehicles registered. A Whelan staffer said the bill will be amended in May to apply to electric and alternative-fuel cars such as natural gas.

A motorist advocate who did the math said electric car drivers would pay more than drivers of gasoline-fueled cars. Whelan said he believes the charge would be comparable to the gas taxes.

“At 12,000 miles per year, that comes to $100.68,” said Steve Carrallas, state director of the National Motorists Association New Jersey chapter. “I did a calculation for the state’s 10.5 cents-a-gallon gas tax for a car averaging 25 mpg that travels 12,000 miles in a year and that comes to $50.40. Why do they want (electric car drivers) to pay more?”

Using that calculation, drivers who log 25,000 miles a year in an electric- or alternative-fuel vehicle would owe $209.75.

Michael Thwaite of Warren, N.J., who owns a small fleet of electric vehicles including an electric BMW and a high-performance Tesla Roadster, said he has no problem paying his fair share for road maintenance. But Thwaite, who is also president of the New Jersey chapter of the Electric Automobile Association, said he wants a level playing field between gasoline- and electric-fueled vehicles.

 

 

“We’ve discussed it, and the consensus is fair is fair. At the end of the day, we’re all car drivers and we still chew up the roads and have a debt to society,” said Thwaite, who commutes about 40 miles to Tinton Falls, N.J., daily in an electric car.

Thwaite pointed out the benefits of electric cars: They leave no oil or fluid leaks and have less brake wear, meaning less dust from brake pads, than their gasoline-powered cousins.

“What I’m left with is a tax on my car, which looks a little punitive and is not going the right way if we’re trying to incentivize people to use electric cars,” he said.

Other states have dealt with the issue by charging flat fees. Virginia charges owners of hybrid, electric and alternative fuel vehicles a $64 annual fee for road maintenance and improvement. Washington state also started charging a $100 fee to owners of all electric vehicles for road maintenance in February, which is paid when the owner renews the vehicle registration.

If Whelan’s bill becomes law, electric car drivers would be saddled with paperwork that includes tracking mileage and reporting it to the New Jersey Motor Vehicle Commission.

The state then would have to audit motorists and institute fines for late submissions or under reporting of miles.

“It would work similar to income tax where people (who are self-employed) self-report and, occasionally, (the state Department of the) Treasury will do an audit of how many miles you drive,” Whelan said. “We’d hope people would be honest.”

 

 

Electric vehicle tax vs. gasoline tax

A New Jersey proposal would charge electric-vehicle owners more for driving than gasoline-powered vehicles. Here is a breakdown of the costs, with electric vehicles being taxed at 0.00839 cents per mile compared with a regular car that gets 25 mpg and pays a 14.5-cents-per-gallon tax.

 

MILES DRIVEN PROPOSED ELECTRIC-VEHICLE TAX CURRENT GAS TAXES DIFFERENCE IN CHARGES
5,000 $41.95 $29.00 $12.95
12,000 $100.68 $69.60 $31.08
15,000 $125.85 $87.00 $38.85
25,000 $209.75 $145.00 $64.75

 

Sources: Mileage Based User Fee Alliance and Congressional Research Service study of road financing options