Tax Laws - Pay to Save

If you're an owner or plan to purchase an electric vehicle or plug-in, the new tax laws around green vehicle technology have your interest peaked.

As states try to compensate for the lost revenue generated by the gas tax, new charges for these environmentally-friendly vehicles are increasing.  In 8 states, we will see higher registration fees, and in most U.S states, a special fee will be imposed on gas-free cars, trucks, and SUV's.  As the popularity around green technology increases, the need to update the infrastructure of the nation to accommodate these trendy cars is increasing.  

While plug-in hybrid and electric vehicle owners represent a small percentage of new vehicle sales in past years, in this new decade, the rate is expected to rise substantially. States are doing their best to figure out what's a reasonable fee, and that's no easy equation.  

Incentives to buy electric had been supported in many states and by the Federal government too.  Those tax credits are slowly being eliminated for some of the leading models, most notably made by Tesla and General Motors.  Not only are tax credits fading, but some states are also finding creative ways to enact fees that will help off-set the gas-tax loss.  In Illinois, for example, up until now, the license plate fee for buying electric was a mere $35 compared to the almost $100 cost for gas motorized vehicles.  This registration fee is increasing to $148 plus and a separate additional $100 fee in place of the gas-tax.  Other states are following suit.  In Alabama, a new $200 fee on electric vehicles and $100 fee on plug-in' will help update roads and bridges. At the same time, a smaller portion will go towards providing the necessary installation of charging stations to accommodate this newer technology. 

It may come as a bit of shock when seeing these increases in black and white; however, States are just attempting to figure it all out, and the impact of these hikes, in many cases, are lower than what you'd typically pay in fuel-taxes.

Some view these new tax laws as a way to discourage going electric, to plan for the future, we need to evolve from the taxes of the past.