States Hitting EV, Hybrid Owners With More Taxes

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Gotta pay for all those roads somehow…

We’ve all seen the smug personalized license plates on Teslas and other plug-in electric cars. Now you can laugh at the guy proudly displaying “GASLOL” knowing he’s paying an extra annual registration fee for the privilege of not burning gas. Many EV and plug-in hybrid owners aren’t happy about the extra money they have to shell out to the government, but it’s ostensibly for a good cause.

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Every time you fill up at the pump, you’re pumping money into the state and federal coffers. According to the U.S. Energy Information Administration, the federal tax rate on gasoline is $0.183 per gallon and $0.243 per gallon of diesel. Each state charges its own rate, with EIA claiming the average is $0.3102 a gallon for gas and $0.32.66 for each gallon of diesel. Depending on how much you drive and how fuel efficient your car is, that can add up. Per the Urban Institute, back in 2019 state and local governments collected $52 billion from fuel taxes.

The money collected through taxes on fuel is supposed to be used for road maintenance and improvement. However, state governments often dip into those funds for all sorts of other pet projects, some you might even think are good. For example, New York and New Jersey divert over a third of fuel tax money to fund public transportation services. So let’s all understand that these fuel taxes don’t strictly go toward the roads we all drive on – that’s just the pretense.