Gov. Abbott signs annual EV tax bill into law
Texas Governor, Greg Abbot signed Senate Bill 505 into law over the weekend, requiring electric vehicle owners to pay $400 to register a new electric vehicle, on top of other fees. Renewing registration will cost $200.
The purpose of the fee is to guarantee that owners of electric vehicles contribute their fair portion towards highway expenses, typically funded by a 20 cent-per-gallon gas tax paid by owners of gasoline-powered and hybrid vehicles.
The bill passed a vote in the Texas State House in late April with a unanimous vote. Republican state Sen. Robert Nichols, who sponsored the legislation, said an additional electric vehicle fee is necessary because EV drivers don't pay gas taxes when they fuel their vehicles.
"As more of these vehicles drive on Texas roads, there are concerns about how they contribute to the funding of the roads which they use," Nichols wrote in a statement of intent when filing the bill. "Currently, Texas uses the gasoline/diesel fuel tax to fund transportation projects; however, with the growing use of EVs, the revenue from the fuel tax is decreasing, which diminishes our ability to fund road improvements for all drivers."
According to a report from the Dallas Morning News, Texas has nearly 200,000 electric vehicles in the state. More than 30,000 new electric vehicles have been added to the roads just this year.
The report also states that the average gas-fueled vehicle owner contributes around $130 annually in state gas taxes. Both this tax and the recently introduced electric vehicle tax are allocated to the state highway fund, with a portion of the revenue also being allocated to schools.
The new tax, which is expected to go into effect on September 1st, is expected to funnel at least $38 million in new money to the state highway fund, while gas and diesel taxes will generate an estimated $3.8 billion in revenue for Texas in 2024.
By Michael Elkins | [email protected]