Iowa's electric vehicle taxes set to go up

Iowa's electric vehicle owners will pay more at charging stations starting in July.

Driving the news: Similar to a gas tax, the state is implementing a $.026 per kilowatt hour excise tax at public charging stations.

• That's on top of an annual supplemental EV registration fee of $130.

Why it matters: Electric vehicles are expected to be the “new normal” someday.

• President Biden's goal by 2030 is for half of U.S. vehicle sales to be electric, writes Axios’ Ben Geman.
• As of Dec. 2022, 10,722 electric vehicles were registered in Iowa — about .2% of all cars in the state.

What's happening: The Iowa Department of Transportation says the fees are needed to help offset the decline of fuel tax revenue as the EV market grows.

• Iowa lawmakers passed the new fee structure in 2019.

What they're saying: Most states don’t charge an additional registration fee as well as an excise tax, Kerri Johannsen of the Iowa Environmental Council told Axios.

• She worries that fewer businesses, especially in rural areas, will want to install charging stations if they have to start documenting and charging taxes.

• 20% of Iowa's charging stations are currently "non-networked," meaning they don't have internet access to collect usage data or charge users a fee.

The bottom line: Additional electric vehicle fees aren't going to help solve road funding, especially since they make up such a small amount of cars, Chris Harto of Consumer Reports told Axios.

• States will have to find other, more creative ways to fund their roads, he says — especially as cars become more fuel efficient.