Feb 13, 2023 - News

Iowa's electric vehicle taxes set to go up

Illustration of an electric vehicle plugged in, the charging wire has dollar bill signs running inside of it towards the car.

Illustration: Aïda Amer/Axios

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.

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