Special Fees on Plug-In Hybrid and Electric Vehicles

Kristy Hartman and Laura Shields 10/12/2021

electric vehicle charging.

The total number of plug-in electric vehicles sold in the U.S. is estimated at 1.6 million, including more than 164,000 cars sold during the first eight months of 2020. However, plug-in electric vehicle sales in 2020 have so far been markedly lower than sales in 2018 and 2019, likely due to the economic slowdown driven in part by the ongoing COVID-19 pandemic. Roughly 320,000 plug-in electric vehicles were sold in 2019. Sales in 2019 were comparable, but just under those for 2018—a year that saw more electric vehicle (EV) sales in the U.S. market than any other. 

EV sales represent less than 2% of all light-duty car sales in the United States, but as sales increase, some states are concerned increased EV adoption will lower gasoline tax revenues. The repairs and improvements to the nation’s highways traditionally have been funded primarily through federal and state taxes collected at the pump. Because electric vehicles do not require gasoline to operate, they do not contribute to the upkeep of highways through a gas tax.

Many states face declining gas tax revenue—not only because of electric vehicles—forcing state policymakers to consider other ways to pay for the nation’s transportation infrastructure. One growing policy trend is applying a separate registration fee for certain hybrid or electric vehicles. These fees come in addition to standard motor vehicle registration fees and proponents support the fees to bring equity among drivers by ensuring all drivers pay for using roadways.

States With Fees on Plug-In Hybrid and/or Electric Vehicles

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Click on the states to read special registration fee for plug-in electric vehicles.

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State Action

Thirty states have laws requiring a special registration fee for plug-in electric vehicles. Of those, 14 states also assess a fee on plug-in hybrid vehicles. These fees are typically in addition to traditional motor vehicle registration fees.

Ten states—Alabama, Arkansas, Hawaii, Illinois, Iowa, Kansas, North Dakota, Ohio, Washington and Wyoming—enacted laws in 2019 amending or adding new fees for plug-in electric and some plug-in hybrid vehicles, more than any previous year. As of November 2020, 28 states have laws requiring a special registration fee for plug-in electric vehicles. Of those, 14 states also assess a separate, slightly lower fee on plug-in hybrid vehicles. 

The fees range from $50 per year in Colorado, South Dakota and Hawaii to $225 for a plug-in electric vehicle in Washington. Alabama, Arkansas, Ohio and Wyoming all enacted bills in 2019, setting or increasing fees for electric vehicles to $200 annually. Most recently, Oklahoma and South Dakota both enacted legislation in 2021 to impose new EV fees. South Dakota now imposes a flat $50 fee for all PEVs, while Oklahoma has tiered EV fees based on vehicle weight, with a $110 fee for EVs under 6,000 pounds. Idaho introduced legislation in April 2021, currently pending, that would increase the state’s EV registration fee from $140 to $300 annually. If enacted, it would also create an alternative 2.5 cents per mile fee system, which drivers can pay in lieu of the $300 fee.

Revenue from these additional fees is most often directed toward a state transportation fund. However, a few states also allocate some fee revenue to support electric vehicle infrastructure. For example, Alabama allocates $50 of its $200 fee for new electric vehicle infrastructure and Washington added an additional $75 fee in 2019 to support charging stations. Colorado dedicates $20 of the $50 EV fee to the Electric Vehicle Grand Fund to support charging stations.

Fourteen states also impose a fee for plug-in hybrid vehicles that operate on a combination of electricity and gasoline. The fee for plug-in hybrid vehicles is $32 in Iowa but will increase to $48.75 in 2021, and $100 in Alabama, Arkansas, Ohio and West Virginia. South Carolina is the only state without an annual fee, and instead requires a payment of $120 for all-electric cars and $60 for plug-in hybrid vehicles, every two years.

At least five states—California, Indiana, Michigan, Mississippi and Utah—structure the additional registration fees to grow over time by tying the fees to the consumer price index or another inflation-related metric. These states are striving to avoid the declining purchasing power of gas taxes due to years of fixed-rate structures.

Road User Charges (RUCs)

Special registration fees are not the only mechanism states are considering to address lower gas tax revenue and equity among drivers. In 2019 and 2020, at least 19 states considered 34 pieces of legislation addressing road user charges (RUCs). Of those, at least seven states—Maine, Nevada, New Mexico, Oregon, Utah, Virginia and Washington—enacted eight new laws. Also known as Vehicle Miles Traveled (VMT) fees or Mileage-Based User Fees (MBUF), this transportation funding mechanism seeks to more closely link transportation taxes to the actual use of the roadways by a driver, as compared to traditional fuel taxes.

Since 2013, at least 10 states have enacted studies or pilot programs examining the feasibility of RUCs. These efforts also have been supported by the federal government through the Surface Transportation System Funding Alternatives (STSFA) grant program. Eleven states have received STSFA grant awards, to date. A RUC funding model requires drivers to pay based on miles driven, instead of gallons of fuel consumed. Oregon and Utah allow drivers to participate in a RUC program, in lieu of paying special registration fees on plug-in hybrid and electric vehicles. 

Oregon’s OreGo was launched as a pilot program in 2015, expanded by HB 2017 (2017) and again modified by HB 2881 (2019). Key provisions of the new law removed the cap on the number of vehicles that may participate, increased the minimum miles per gallon (mpg) rating by three to 20 MPG, replaced the per-mile charge with a formula equal to 5% of the state’s per-gallon gasoline license tax and ended refunds to participants paying more in fuel taxes than what was owed in per-mile charges. Eligible vehicles pay a base registration fee of $43 annually, plus an RUC amounting to 1.8 cents per mile, according to Oregon’s Department of Transportation

Utah’s program, established through SB 136 (2018) and SB 72 (2019), sets a per-mile rate of 1.5 cents per mile until the accumulated total matches the annual flat fee. In 2020, Utah’s flat fee for electric vehicles is $90 and increases to $120 in 2021.  RUC participants can never be charged more than this fee and receive monthly invoices based on miles driven. For electric vehicles, $120 is equal to 8,000 miles driven, according to Utah's Department of Transportation

To learn more about road user charges and what states are doing, please visit NCSL’s RUC webpage. NCSL also tracks state legislation related to RUC in its Transportation Funding and Finance Legislation Database.

Hybrid and Electric Vehicle Categories

Hybrid and electric vehicles generally fall into the following categories:

  • Plug-in electric vehicles (PEV). This is a general term for any car that runs at least partially on battery power and is charged using electricity.
  • Battery electric vehicles (BEV). BEVs, such as the Nissan Leaf, run entirely on an electric motor and rechargeable battery. This is also referred to as an all-electric vehicle.
  • Plug-in hybrid electric vehicles (PHEV). PHEVs, such as the Chevrolet Volt, combine two propulsion modes in one vehicle. They have an electric motor and rechargeable battery, but can switch to gasoline once the battery power is depleted.
  • Hybrid Electric vehicles (HEV). HEVs, such as the Toyota Prius, use a gasoline engine with an electric motor. Although these vehicles have an electric motor and battery, they don’t plug in to be recharged.

Additional Resources 

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