Motor Fuels Tax Minute, Episode 101: Delaware Alternative Fuel Vehicle Fee

In this episode of Motor Fuels Tax Minute, our hosts discuss Delaware’s new vehicle fees and the broader implications for motor fuel taxes.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 101

00:00:00
Kelly: Welcome to this week’s Motor Fuels Tax Minute, where we talk all things motor fuels. Today, my mom got an interesting notification in the mail. She drives a hybrid vehicle and Delaware is now enacting an annual fee on all electric, hybrid and any alternative fuel vehicles.

This fee can be as low as $15 for motorcycles. Most of us would have ended up paying around $110 for cars, SUVs, and then the highest would be $900 for those class 7, class 8 vehicles like tractor-trailer trucks. What are your thoughts on this, Leanne?

00:00:35
Leanne: Well, that’s interesting and it’s just another example as we’re starting to see the states try to grapple with these alternative fuels, but in particular, the electric vehicles.

You know, hybrids have been around for a while and those vehicles do use gas, but the electric vehicles, of course, don’t. So, the states and the federal government, although we’ve not seen quite as much movement from the federal government, so the states are really having to think, how do I replace the gas tax?

I think most states do use the gas tax to fund the highways and we can talk all day about the highways in this state and the highways in that state, but if the electric vehicle owners are not buying gas for their vehicle, then that’s a big revenue source that is not there. And so how do you replace it?

So, it’s interesting what the angle that Delaware has taken and the annual fee part of it is also interesting, but of course it doesn’t replace the gas.

You know, a tractor-trailer is spending a lot more than $900 in gas a year, but it is a bigger revenue raiser than other states where you may pay one time for a decal or a license plate for your EV and it costs extra money, but it’s just a one-time thing. And then if you have to renew your registration, there could be a small fee as part of it like Delaware, or maybe it’s just not there at all, then it’s one time.

And of course, we do have some states that have looked at excise tax, and so it’s more on the charging stations as it’s being pulled out rather than on the individual and it’s factored into the price, of course, but it’s reported by those charging stations or by the people that are supplying the power to the charging stations.

Lots of different ways of thinking about it and different ways of doing it, but it is a problem that needs to be solved. So, I think it’s interesting to see a different way of solving it than what we’ve seen before.

00:02:20
Kelly: Absolutely, and you brought up a good point. If you drive a hybrid, you’re still filling up with gas and now you’re also paying this fee, so I’m sure they’re going to feel a little more hurt by this than some others, but it is interesting how it’s evolving, and the states are grappling with it and the technology just keeps growing.

Delaware, like I said, was really broad to cover all alternative fuel vehicles, not just focusing in on the electric vehicles, which I thought was interesting, but we definitely had a great blog that was written by our team members if anyone wants to find out a little bit more about EV vehicles and how the different states are taxing it.

And of course, you can always reach out to our team. So, this was this week’s Motor Fuels Tax Minute. Thank you for joining us.

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