How Much Does NJ Per-Mile Tax Bill Affect Plug-In Cars?

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It was always going to happen: Several states around the U.S. have realized they can charge electric car owners a tax to make up for the fact they don't pay any gas tax.

Unfortunately, several states have also lumbered electric cars with an unfairly high tax--but is New Jersey's proposed per-mile tax rate another of those punitive charges, or more fair than it seems?

In our experience, many electric vehicle owners don't actually mind paying a little tax to use their vehicles--after all, it pays for road maintenance and upkeep, and ultimately the roads benefit everyone in one way or another.

Michigan, Washington, Oregon, Virginia, Arizona and Texas have all recently proposed or instated electric car taxes, some more fair than others. Fixed fees, mileage charges and other means have all been used to recoup a little of the money lost from electric drivers not paying tax on liquid fuel.

The bill, number S2531 proposed by Democratic Sen. James Whelan of Atlantic City, NJ, uses a per-mile charge of 0.00839 cents. That sounds miniscule, but for the average driver doing 12,000 miles per year, it equates to $100.68 in tax.

The state's current gas tax is 14.5 cents per gallon. Over the same 12,000 miles per year, at an average of 25 mpg, this would work out at $69.60 in taxes. Well, state taxes anyway--federal taxes add to this amount.

Some news outlets have reported that the state's new tax applies only to electric vehicles, highlighting the injustice of taxing electric cars at a higher rate than the tax regular drivers would have to pay on gasoline. Were this clearly the case, we'd agree.

But bill S2531 doesn't actually mention electric vehicles anywhere. Specifically, the bill "Establishes mileage-based fee on passenger vehicles; exempts passenger vehicles from motor fuels tax."

Were the bill to maintain current gasoline tax and only charge electric vehicles at the 0.00839 cents per mile rate, they'd indeed be more expensive--but as we see it, the new bill would charge electric and gasoline vehicles at exactly the same rate.

Mileage would be recorded at the time of vehicle sale, then submitted annually allowing the state to calculate the correct tax. It could also be checked during the state's bi-annual emissions inspection (pdf file).

Meanwhile, the state's 14.5 cent per gallon gas tax would disappear--but the driver of a gasoline car doing 12,000 miles per year would end up paying more anyway, equivalent to the $100.68 figure rather than the current $69.60. And they'd still be paying the federal gas tax, which owners of electric cars wouldn't be.

The bottom line? New Jersey's new per-mile tax actually looks quite fair to us.

It's there solely to ensure New Jersey electric vehicle drivers pay the same amount for the roads as anyone else. Not more, not less--the same amount. If that's the way it stays should the bill be passed, electric car owners shouldn't have much to worry about.

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