Loss of state gas tax revenues due to EV use may have already hit the state to the tune of $78M annually.
Electric Vehicles (EVs) may be all the rage for the environmentally aware on the roadways. But a new analysis by Florida TaxWatch shows EVs are taking a toll on the state’s tax revenue coffers.
The government-spending watchdog group issued the “Fair Share Taxes Driven Away By Electric Vehicles” report this month. The research project shows EVs and plug-in hybrid vehicles are beginning to drive down some revenues for gas taxes in Florida, in particular the Highway Fuel Tax.
“Electric vehicles and plug-in hybrid electric vehicles can cruise the state’s highway system without paying the Highway Fuel Tax. Although the purchase of electricity collects a sales tax, it does not directly contribute to the State Transportation Trust Fund,” said Dominic Calabro, President of Florida TaxWatch. “As electric vehicles and plug-in hybrid electric vehicles continue to grow in popularity, policymakers should consider how their market share affects the state’s ability to invest in transportation infrastructure.”
There were a combined 312,000 registered EVs and hybrids in the state in 2023, a massive increase just over 2016 and it’s projected, according to TaxWatch, those figures will jump to about 40% to 50% of all vehicles in the United States by the end of this decade.
The loss of gas tax revenue due to EVs could be substantial in the next two decades, according to the TaxWatch analysis. If there are no substantial policy changes in Florida, State Transportation Trust Fund dollars could drop by 20% by 2040. TaxWarch estimates that EV and hybrid use has already dinged fuel tax revenues to the tune of $46.4 million to $78.3 million annually.
Given the growing popularity of EVs and hybrids, TaxWatch Executive Vice President and General Counsel Jeff Kottkamp said Florida needs to come up with a plan to compensate for lost revenues on gas taxes due to the increased use of the environmentally practical cars.
“Florida is one of the few states that has not implemented an alternative way to collect tax dollars from electric vehicle drivers,” Kottcamp said. “Given the legislature’s understandable aversion to increasing taxes, Florida TaxWatch considers the monthly redistribution from sales tax revenue to the State Transportation Trust Fund, as proposed in current legislation, to be a responsible first step.”
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