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Question of the Month ~ May 2017

 

Q. Which Midwestern states impose additional or special registration fees on electric vehicles? 

With a rise in the sale of electric vehicles, states lose some of the revenue that they’ve long relied on to pay for transportation projects: taxes on motor fuels. One response by some legislatures, in the Midwest and around the country, has been to impose additional registration fees on the owners of these cars. 
At the start of this year, 10 U.S. states already were imposing extra registration fees, and Indiana became the 11th in April with passage of HB 1002. Starting in 2018, the owners of electric vehicles will pay an annual registration fee of $150; the fee for hybrid vehicles is $50 a year. HB 1002 also includes a $15 annual infrastructure fee on every vehicle and increases the state’s gas tax (for the first time in more than a dozen years) by 10 cents per gallon.
During this year’s legislative sessions, lawmakers in at least two other Midwestern states, Minnesota and Kansas, also considered new fees on electric vehicles. Minnesota’s HF 1133/SF 2029, for example, calls for a surcharge of $85. In Kansas, HB 2060 would have required an additional $150 fee on electric vehicles ($75 on hybrid vehicles); it stalled in legislative committee.  
Other Midwestern states that have previously considered, but ultimately failed, to enact extra registration fees on electric vehicles include North Dakota, South Dakota and Wisconsin.  
Nebraska was the first state in the Midwest to impose such a fee, with owners of these cars having to pay an additional $75 annually. Beginning this year, electric vehicle owners in Michigan are being assessed a $100 annual surcharge, along with a $35 gasoline tax, in addition to the state’s standard vehicle-registration fee (which is about $120). Michigan’s extra fees on electric vehicles were part of a 2015 legislative package that provided $1.2 billion in road construction funding and raised the state’s standard vehicle-registration fees by 20 percent.

 

Article written by Laura Tomaka, a CSG Midwest senior program manager. Question of the Month highlights an inquiry sent to CSG Midwest.