New US Bill Proposes Annual Tax on Electric Vehicles to Replace Gas Revenue
A new US bill proposes an annual tax on electric vehicles (EVs) as part of broader transport funding changes. The measure, included in the Surface Transport Reauthorization Bill, would charge EV owners up to $150 per year. Supporters argue it would offset lost revenue from declining gas tax collections, which have remained unchanged since 1993. The proposed tax targets fully electric vehicles at $130 per year, with plug-in hybrids paying $35. These fees would rise by $5 annually, capping at $150 and $50 respectively. By comparison, the average petrol car contributes roughly $80 per year in federal gas tax, which currently stands at 18.4 cents per gallon.
States would collect the tax, with the federal government threatening to withhold transport funds from those refusing to comply. Some states have already suspended gas taxes while continuing to tax EVs, and others may follow. The bill also slashes funding for clean transport initiatives, including EV charging networks, freight electrification, and electric buses. The tax’s leading advocate, Sam Graves (R-MO), received $163,300 from the oil and gas industry during the last election cycle. Critics highlight that fossil fuel subsidies in the US total an estimated $760 billion annually, with each gallon of petrol burning costing over $5 in health and environmental damages. An earlier $200/year EV tax proposal failed due to collection difficulties, leading to the revised, lower-rate plan.
If passed, the tax would take effect alongside cuts to green transport programmes. EV owners would face higher annual fees than petrol drivers, despite fossil fuels receiving far larger subsidies. The bill’s fate now rests with lawmakers as states weigh compliance with the new rules.
