SB 505 was a top priority bill this session for TFFA, to ensure that EV purchasers pay their fare share of road tax. TFFA thanks Sen. Schwertner (R – Georgetown) and Rep. Canales (D – Edinburg) for the diligence on this issue.

Electric vehicles in Texas face new tax as Gov. Abbott signs law

Story by Philip Jankowski, The Dallas Morning News • Yesterday 11:50 AM

 AUSTIN — The whirling whoosh of electric vehicles now comes with a new price in Texas — $200 a year — under a new tax signed into law this weekend.

Gov. Greg Abbott made the tax official Saturday, signing the legislative proposal into law with no fanfare or announcement. The law takes effect Sept. 1.

It will require the owners of electric vehicles to pay $400 to register a new electric vehicle on top of other fees. Renewing registration would cost $200.

Owners of hybrids and gas-fueled vehicles do not pay such fees. Those drivers instead pay a 20-cent per gallon gas tax.

The new tax does not apply to electric motorcycles, mopeds and autocycles.

Texas has nearly 200,000 electric vehicles in the state, with more than 30,000 new EVs added to the roads so far this year, according to data from the Dallas-Fort Worth Clean Cities Coalition.

Both the gas tax and electric vehicle tax are dedicated to the state highway fund, though some gas tax revenue is diverted to schools as well. The new tax will funnel at least $38 million in new money to the state highway fund. Gasoline and diesel taxes will generate an estimated $3.8 billion in revenue for the state in 2024, according to the comptroller’s office.

“This is extremely important to make sure people are paying their fair share and that we have adequate funding for the preservation and maintenance of our highways in the future,” said state House Rep. Terry Canales, an Edinburgh Democrat, during debate on the law in April.

The average owner of a gasoline-fueled vehicle pays roughly $130 in state gas taxes per year, according to average annual mileage and fuel economy data maintained by the Federal Highway Administration and the Environmental Protection Agency.

During debate over the bill in the House on April 24, legislators floated an idea of creating a lower tier of electric vehicle fees set at $100 a year for lighter-weight vehicles.

“When we are comparing these fees, we need to be comparing them to like-minded counterparts,” Rep. Erin Zweiner, D-Driftwood, said during the debate.

That idea was defeated, and the bill was passed with wide bipartisan support.

©2023 The Dallas Morning News. Visit dallasnews.com. Distributed by Tribune Content Agency, LLC.