Potential Pieces of Good News for EVs Assembled in the US

[Scorpio3d]

I am sure they would never create a department of EV-BEV tax collection (DEBT) and hire back the IRS agents they got rid of just to screw us!

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[TaxmanHog]

The IRS has a process for collection of highway use tax from heavy trucks, each August all required trucks need to file form 2290, in so declaring by VIN and weight class the appropriate amount of excise tax due, running from hundreds to thousands of dollars depending on the size of the fleet.

Back in the day, early in my career, I worked walk in customer service at field posts of duty, we would get swamped by truckers, sole operators and large fleet managers alike, wanting to file their 2290 in person and securing a date IRS received date stamp that the return was filed with full remittance attached. I received many dollars during this period.

Many states will not allow the registration renewal of the truck to be completed if there is no proof of compliance in paying the excise tax.

Moving forward into the 21st century, the method I would recommend, is that state vehicle registries assess and collect the proposed excise tax directly, and remit these funds back to the US Treasury. IMHO, they should NOT expand the form 2290 process to personally owned BEV's or Hybrids.

 

[MotoGary]

Seems like the headline here is that the tax credit will expire at the end of this year for most vehicles. So even though I've owned my Lightning for less than a year, I may consider a trade before the end of this year.

 

[John Becker]

Moving forward into the 21st century, the method I would recommend, is that state vehicle registries assess and collect the proposed excise tax directly, and remit these funds back to the US Treasury. IMHO, they should NOT expand the form 2290 process to personally owned BEV's or Hybrids.

Yep. I anticipate that the DMVs (Department of Motor Vehicles) will collect it when license plates get renewed. It will just be one of the many fees.

 

[astrand1]

Seems like the headline here is that the tax credit will expire at the end of this year for most vehicles. So even though I've owned my Lightning for less than a year, I may consider a trade before the end of this year.

Why? You bought the truck as long as your income isn’t over the limit you’ll get the credit or you got it at point of sale.

 

[chl]

As mentioned above you can still take the interest deduction if you also take the standard deduction.

The $250 isn't too bad as long as you state doesn't also add a surcharge (see below).

The problem with the $250 is that it is FAR more than the average driver pays in federal gas tax. It's approximately what the average driver pays in federal and state gas taxes. My state already adds a registration fee for EVs that covers lost state and federal gas taxes. If I get hit with both I'll be pissed. It would be double taxation and a windfall for the government.

I don't know how the feds would collect it since there's not a mechanism for them to do so currently. That's why I'm hopeful it doesn't end up passing. There would be some significant administrative costs.

Virginia has a program that prorates the road use fee (gas tax offset) based on miles driven.
That is fairer to us folks that don't drive a lot.

But I am not sure if it was designed to cover both state AND fed gas tax. If so then the program will have to change to take this new law into account IF it goes into effect.

I believe $250 is definitely way more than I would have paid in federal gas taxes per year if I still drove an ICE truck.

If we get double-taxed because of the road use fee then the states ought to allow a deduction on the state income tax return (unless you're in a state with no state income tax, like Florida).

By driving electric we are reducing air pollution and reducing the harmful effects of same, which will reduce the number of cases of lung disease, etc. which is a cost saving to society, including the federal and state governments that subsidize health care through various programs including medicare, medicaid, VA medical benefits, etc.

But we get no credit for that "externality" as economists call it. Nor are ICE vehicle, oil companies, etc., financially penalized for the detriment they cause.

As my dad used to say "virtue is its own reward" and "no good deed goes unpunished."

As true as ever.

Give unto Caesar that which is Caesar's....

 

[DatOleMan]

They’re taking us back to the stone ages. They’re eliminating all the incentives to get us to buy into new tech. This is not consumer friendly, this is to give corporations back the money they’ve lost to clean energy. This is to discourage people that’s already on the fence. I’m fine with a road tax, I’ve been paying IFTA since I’ve been in the trucking industry, but this tax bill doesn’t work for me.
Power companies: the energy prices are high because the strain on the grid. Everyone uses government tax incentives to get solar and now power companies are lobbying because they’re losing money.
Oil companies: the fuel is high because of demand. I think more EV’s on the road should alleviate some strain on the supply chain.
We have the MME and Lightning, and 20 panel solar array. I love passing by gas/charging stations and opening up my electric bill. We send power back the grid, the power company lobbied to pay a discounted rate and then sell at full price, for something they didn’t generate.
They’ll find a way to get them their profits and dividends.

 

[RocketGhost]

Virginia has a program that prorates the road use fee (gas tax offset) based on miles driven.
That is fairer to us folks that don't drive a lot.

But I am not sure if it was designed to cover both state AND fed gas tax. If so then the program will have to change to take this new law into account IF it goes into effect.

I believe $250 is definitely way more than I would have paid in federal gas taxes per year if I still drove an ICE truck.

If we get double-taxed because of the road use fee then the states ought to allow a deduction on the state income tax return (unless you're in a state with no state income tax, like Florida).

Tennessee relied on an independent study to determine the average amount an average ICE driver pays in state and federal gas taxes and that's how they set the EV fee. Their justification for collecting for fed taxes is that the money would be flowing back to the state.

We don't have vehicle inspections nor state income tax. So it would be hard to tax based on use.

I drive fewer miles than average, so I'm paying more now. As a result I'm driving my truck more instead of our ICE vehicles.

My biggest beef with the way TN is doing it is that they are indexing the EV fee to inflation, but not the gas tax, which hasn't gone up in decades (and they complain about underfunding for roads). Politically they would have a hard time raising the gas tax, but they can get away with charging EV owners since there's not enough of us to raise a big stink.

I don't see an easy solution. In a perfect world everyone pays the same tax per mile regardless of what you drive. You'd need mileage inspections every year and elimination of the gas tax. Another issue with that is that gas retailers might not lower the price if the tax goes away.

 

[chl]

Tennessee relied on an independent study to determine the average amount an average ICE driver pays in state and federal gas taxes and that's how they set the EV fee. Their justification for collecting for fed taxes is that the money would be flowing back to the state.

We don't have vehicle inspections nor state income tax. So it would be hard to tax based on use.

I drive fewer miles than average, so I'm paying more now. As a result I'm driving my truck more instead of our ICE vehicles.

My biggest beef with the way TN is doing it is that they are indexing the EV fee to inflation, but not the gas tax, which hasn't gone up in decades (and they complain about underfunding for roads). Politically they would have a hard time raising the gas tax, but they can get away with charging EV owners since there's not enough of us to raise a big stink.

I don't see an easy solution. In a perfect world everyone pays the same tax per mile regardless of what you drive. You'd need mileage inspections every year and elimination of the gas tax. Another issue with that is that gas retailers might not lower the price if the tax goes away.

Good points.

In Virginia they have a "Highway Use Fee (HUF)" which:

" ...is calculated based on a vehicle's fuel efficiency, the current fuel tax rate, and the average number of miles driven by all Virginians. It's paid in full at the time of vehicle registration or can be paid over time through the Mileage Choice Program ... The HUF is 85% of the difference between the taxes paid by a vehicle with a 23.7 MPG rating and a vehicle with its actual manufacturer's combined MPG rating ..."

The HUF amount based on MPG (per manufacturer) for our Prius (rated at 50 MPG) is $67.40.

The Virginia Mileage Choice Plan uses a GPS device in each vehicle in the plan to track the miles and pay as you go. You make an initial deposit per vehicle and then they deduct an amount from the deposit based on miles driven at the end of every month and when the balance falls below $10 they deposit another $10 from the CC or bank account on file.

They keep charging the account that way until you reach the total that you would have paid in effect at the date of registration renewal - $123.13 for our 2023 Lightning, $116.49 for our 2012 Leaf, and $67.40 for our 2015 Prius.

For all electric vehicles it is currently $128.14 now (July 2024 to June 2025) - the Leaf is lower because the HUF was lower when I renewed the registration in 2023 for 2 years.

They publish a table that lays it out each July to June year.

The current fuel tax they report at the top of their table is $0.308/gallon, going up to 32.7 cents per gallon in July.

On top of the HUF in Virginia there is a basic registration fee for admin costs which for the Lightning was $43.75 for 1 year. Safety inspection is $20 for all vehicles.

Property taxes on vehicles in my county is based on market value - for the Lightning it was almost $1800 in the first year (2024).

As far as I know, the HUF in Virginia does NOT include federal gas taxes however. I suppose in the future, if the bill is enacted, it may.

" The state gas tax is collected by the Commonwealth of Virginia and is used to fund transportation projects within the state. The federal gas tax is collected by the federal government and is used for a variety of transportation projects across the country. The Virginia Highway Use Fee only addresses the state's portion of transportation funding"

So another $250 may be added to the cost of ownership by the "read my lips, no new taxes (except on EV's and hybrids, solar, and anything else our oil industry sponsors ask for) politicians" in Congress.

Alas.

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