Minnesota is joining a growing number of states to tack an extra registration charge on vehicles powered exclusively by electricity as a way to make up for lost gas tax revenue.
The new $75 surcharge approved by state lawmakers takes effect in January.
The fee is projected to bring in about $40,000 the first two years but revenue estimates more than double in the two years after that. The annual surcharge applies to what are called “all-electric vehicles.” They are able to draw power solely from rechargeable batteries, fuel cells or other electrical currents. Plug-in hybrids that still require some level of gasoline to run wouldn’t be subject to the fee.
House Transportation Finance Chairman Paul Torkelson, R-Hanska, said it’s about fairness in who contributes to road maintenance.
“The impact on the budget of those surcharges on electric vehicles is very small at this point,” Torkelson said. “There just aren’t that many on the road. But we felt it was appropriate to kind of establish a baseline that we expect them to do their share, to pay their share for maintaining our system.”
Those vehicle owners don’t pay the gas tax, which supplies Minnesota’s highway construction fund.
Torkelson said the amount was chosen based on what other states were charging. Some assess up to $150 per year.
“We still felt we were being very reasonable about the amount we set,” he said, adding, “We’re not trying to eliminate electric vehicles or the advantages of having one.”
Under the law signed last week, the new surcharge will be directed into the road-maintenance fund.