Legislation in eight states cover hybrid, electric vehicle fees

April 21, 2021

Keith Goble


Legislators around the country are taking steps to address supplementing transportation funding via hybrid and electric vehicles.

Popularity for such vehicles is expected to grow in the coming decades. As a result, state officials are taking steps to make sure they will be able to capture needed transportation revenue from owners of fuel-efficient or alternative fuel vehicles.

About 30 states impose a special registration fee for plug-in electric and/or plug-in hybrid vehicles. Fees range from about $50 annually for plug-in hybrid vehicles in Iowa to $225 yearly for plug-in electric vehicles in Washington.

Below is a rundown of notable efforts in statehouses to address revenue raised via alternative fuel vehicles.

Reversing course in Arkansas

A new law in Arkansas goes in the opposite direction of the pursuit of additional revenue from owners of alternative fuel vehicles.

Two years after state lawmakers authorized an additional registration and annual renewal fee on hybrid and electric vehicle registrations, Gov. Asa Hutchinson signed into law a bill to reverse course.

Previously SB225, the new law reduces from $100 to $50 the fee collected from hybrid vehicle owners. The $200 fee applied to electric vehicle registrations also will be reduced to $50.

Reduction of the annual fee is estimated by the state’s Department of Finance and Administration to reduce revenue by $1.1 million.


Two Florida Senate bills would result in collecting more money from owners of hybrid and electric vehicles.

The first bill, SB140, would apply a $135 flat fee to license an electric vehicle up to 10,000 pounds. The rate would increase to $150 in 2025.

Affected vehicles weighing at least 10,000 pounds would include a $235 license fee. The fee would be raised to $250 in 2025.

Hybrid vehicle owners would be responsible for paying a $35 licensing fee. The amount would increase to $50 in 2025.

Revenue raised via the licensing fees would be deposited into the state’s Transportation Trust Fund.

Passage of the bill is contingent upon approval of a related bill to set up a grant program.

The bill, SB138, would permit state agencies and local governments to apply for funds via the fees authorized in SB140. The revenue would be used to develop plans to add charging stations.


In Minnesota, a transportation bill includes a provision to increase surcharges on electric vehicles and hybrids.

The surcharge for electric vehicles would increase from $75 to $229. A surcharge of $114.50 would also be collected on plug-in hybrid vehicles.

Both fees would be tied to the state’s fuel tax.

“Gas taxes run the risk of being regressive, but if EV owners contribute to this fund like every other car owner already does, we can avoid that situation altogether,” Sen. Jeff Howe, R-Rockville, previously said in prepared remarks.

“Electric vehicles are heavier than their gas counterparts, and as long as they’re benefiting from state roads they should be paying to maintain them too.”

SF1159 is on the Senate floor.


The Montana Senate Finance and Claims Committee held a hearing Tuesday on a House-approved bill to tap electric vehicles to help cover costs for road upkeep and construction. The fee would not apply to hybrid vehicles.

Sponsored by Rep. Denley Loge, R-St. Regis, the bill would implement a new annual fee on all electric vehicles registered in the state. Specifically, affected vehicles under 6,000 pounds would be charged $150. Affected vehicles between 6,000 pounds and 26,000 pounds would be charged $250. Larger electric trucks would pay $500 annually.

Loge says the annual cost would be cheaper than what fuel-powered vehicle owners pay for pump taxes.

“There is the same wear and tear of an electric car as there is of a gas-run vehicle or diesel-run vehicle,” Logue testified. “This just puts them in a bracket they can be paying for some of the road use the rest of us are paying.”

A fiscal note attached to the bill reports there are 996 electric vehicles in the state. The number of such vehicles is expected to grow annually.

The proposed fees are estimated to raise $241,350 by fiscal year 2025.

The committee voted to advance HB188 to the Senate floor.


The Oklahoma Legislature has approved a bill that focuses on collecting additional revenue from electric and hybrid vehicles.

Sponsors of HB2234 say the effort is intended to ensure all vehicles using Oklahoma highways are contributing to the cost of maintaining the systems in a “fair and equitable manner.”

The bill on Gov. Kevin Stitt’s desk would enact a 3-cent per kilowatt hour tax at public for-profit charging stations. Specifically, a vehicle with a 50kw battery could fully charge for a tax of $1.75 or less.

In-state electric vehicle owners would be eligible for a tax credit up to the amount of their annual registration for fees paid at public charging stations.

Advocates say the tax would allow the state to collect revenue from out-of-state vehicles.

Additionally, an annual vehicle registration fee would be applied for electric vehicles. A bill summary states the fee would vary based on vehicle model, ranging from $110 to $1,687.

Sen. Zack Taylor, R-Seminole, said that while fuel taxes are one of the main sources of funding for Oklahoma’s roads and bridges, it is important to make sure electric vehicles also are accounted for when funding transportation.

“As electric vehicles have become more popular, it’s clear we must find a fair way to ensure those EV drivers are helping support our transportation infrastructure as well,” Taylor said in prepared remarks.

South Dakota

A new law in South Dakota enacts an annual flat-rate registration fee on many owners of electric vehicles.

Previously HB1053, the new law charges affected noncommercial vehicle owners $50 annually for registration.

An estimated $8,000 annually will be directed to the state’s road maintenance fund.

Sen. Mary Duval, R-Pierre, said on the Senate floor it is time for owners of electric vehicles to contribute to repairs to state roads and bridges.

“This is the right thing to do now to make sure we have good roads and bridges,” Duval said.


In Texas, the House Transportation Committee held a hearing Tuesday on a bill to impose an additional fee for the registration and renewed registration of electric and hybrid vehicles.

Sponsored by Rep. Ken King, R-Hemphill, HB427 would collect an additional fee of $200 for electric vehicles and $100 for hybrid vehicles.

Collecting the additional fees is estimated to raise $60 million in the first year for the state’s highway fund, according to a fiscal note.

The committee did not vote on the bill.


Similarly, two Wisconsin bills would eliminate surcharges collected on owners of electric and hybrid vehicles.

The state collects a $100 annual fee on electric vehicles and a $75 fee on hybrid vehicles.

The legislation would void the surcharges. Instead, a $5 yearly fee would be charged to registrations of vehicles weighing at least 3,000 pounds.

Rep. Lee Snodgrass, D-Appleton, said in a released statement that existing fees on alternative fuel vehicles account for $6.2 million annually for the state’s Transportation Fund. The new proposed fee is estimated to raise $7.1 million per year.

“With the impacts of global climate change we should be doing everything we can to incentive, not discourage Wisconsinites to make green decisions in their purchasing,” Snodgrass wrote. LL

More state trends

Keith Goble, the state legislative editor for Land Line Media, keeps track of many trends among statehouses across the U.S. Here are some recent articles by him.

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.