[knoxev] Re: Fwd: Electric Vehicles: Road Taxes

  • From: Robert Cole <rncole@xxxxxxxxx>
  • To: knoxev@xxxxxxxxxxxxx
  • Date: Fri, 13 May 2022 08:27:51 -0400

Thinking this through and considering as a thought exercise for a more substantial EV future… 
So, the senator is saying that 40% of tax revenue is coming from through travelers instead of residents. For a trip from Knoxville to Memphis, or 392 miles, in a gas car (we’ll go with extremes here) getting 25mpg (old cars!) the state gets 27.4¢/gal and the feds get 18.4¢/gal. That would be 15.68gal to get from A to B, with a potential revenue of $4.29 to the state and $2.88 to the feds. 
So, $7.18 in taxes for that route that are earmarked for roads as that’s how the gas tax works. 
For an EV getting 275Wh/mi, that trip would be 107.8kWh, assuming it’s all DC fast charged, which would raise the highest revenue, let’s assume about an hour of charging at 32¢/min, that would be $19.20 in charging, and at 9.25% that would have included $1.63 in taxes.  HOWEVER, that tax revenue is general sales tax and not earmarked for roads. 
To be clear, I’m not trying to say EV drivers in the state aren’t paying their fair share, but what I think she clarified in the email (vs the blanket statement at the MPO meeting) with is valid - the state gets a substantial portion of road tax revenue from through travelers (40% seems… a LOT… and I'm wondering if it includes semi traffic too) that isn’t made up for by other sources. 
iPhonalicious!

On May 12, 2022, at 16:12, Bob Harris <Bob.Harris@xxxxxxxxxxxxxxxxxxxxxxxxxxx> wrote:



One thing the State conveniently forgets is that they’re already certainly collecting 7% State sales tax, plus the county and city could possibly get up to 2.75% local sales tax, on all electricity purchased through a utility.  Adding the $100 EV Tax is essentially double taxation on several thousand miles worth of EV fuel annually.  There used to be a separate line item on our electrical utility bill for sales tax.  I looked at an old bill and there’s a line for “State Tax” that’s 7% of all our monthly charges.  Although our utility has recently condensed everything into one monthly charge, I’m sure they’re still collecting and passing that 7% along to the State.

 

Although I’m not a tax lawyer, the screenshot below, directly from the Tennessee Department of Revenue, certainly sounds like everything except initial service connection fees are subject to 7% State sales tax.  Since this is from the Sales and Use Tax law, it applies to anything consumed by a business in their operation as well.  It’s most likely that anyone operating a public charging station in Tennessee is paying the State 7% on all the electricity consumed, and we are most certainly paying 7% to Tennessee on any electricity used to charge our EVs at home.  That 7% is specifically called out in law to also apply to demand charges.   For DCFC operators, that could effectively double the tax rate on the electricity actually put into EVs, and that certainly gets passed along to the EV driver as well.

 

I know for a fact that when we operated a string of free public L2 EVSE locations in Blount and Sevier Counties in Tennessee, we paid the state 7% sales tax on all the electricity we provided to EV drivers at no cost, including the minimum monthly amount charged by the utility even if we had zero electrical consumption at a site for the month.  Even as a tax-exempt Tennessee 501(c)3 non-profit with a Tennessee sales tax exemption, the utility would not exempt us from paying the State sales tax on our electricity.

 

Bottom line – EV “fuel”  at home is already taxed at a percentage close to the gasoline tax percentage at today’s gas prices.  For public charging that factors in demand charges which are also taxed, the percentage is likely much higher than on gasoline.  That goes for both state residents and visitors who charge their EVs in Tennessee.  The “invisibility factor” is that money goes into the State general fund and not directly to DOT for roads like the gas and Diesel taxes, but overall the State of Tennessee is making out like a bandit on EV tax revenue.  With no more miles than we put on our ten year old Nissan LEAF on local roads, the $100 EV Tax is pure gravy to Tennessee.  The sales tax we pay on the electricity our LEAF consumes more than pays its way.

 

                           Bob Harris

              Black Bear Solar Institute

Bob.Harris@xxxxxxxxxxxxxxxxxxxxxxxxxxx

                         865-919-2274

 

      

 

      www.BlackBearSolarInstitute.org

             2204 Battle Ground Drive

              Pigeon Forge, TN 37863

 

From: knoxev-bounce@xxxxxxxxxxxxx [mailto:knoxev-bounce@xxxxxxxxxxxxx] On Behalf Of Robert Cole
Sent: Thursday, May 12, 2022 3:03 PM
To: knoxev@xxxxxxxxxxxxx
Subject: [knoxev] Fwd: Electric Vehicles: Road Taxes

 

Mind discussing at KEVA meeting?


Begin forwarded message:

From: Becky Massey <sen.becky.massey@capitol.tngov>
Date: May 12, 2022 at 10:16:06 EDT
To: Robert Cole <rncole@xxxxxxxxx>
Subject: RE: Electric Vehicles: Road Taxes

Hello Robert,

Thank you for reaching out. I want to follow up and provide clarity about my comments.

We need a fair system in our state that includes Tennesseans and visitors in our state paying these taxes, rather than just Tennesseans alone. Currently 40% of toad money comes from out of state visitors, which we do not want to lose. I will continue to look at ideas that are reasonable and appropriate for our state and will be attending two conferences this summer related to electric vehicles and transportation and road usage.

Thank you again for reaching out Please know I will continue to monitor this issue.

Sincerely,

Becky


-----Original Message-----
From: Robert Cole <rncole@xxxxxxxxx>
Sent: Thursday, May 05, 2022 9:51 PM
To: Becky Massey <sen.becky.massey@xxxxxxxxxxxxxx>
Subject: Electric Vehicles: Road Taxes

Senator Massey,

I understand in your remarks at the Knoxville MPO conference included a statement regarding electric vehicle owners paying their fair share for damages caused to roads.

As an EV owner and advocate, this comment concerned me as TN does have a tax paid during registration renewal ($100) which is equivalent to the taxes on approximately 365 gallons of gasoline. This would be approximately the same taxes paid to the state of a 32mpg vehicle driving 12,000 mi per year.

That said, if you are interested in alternative taxation methodologies - particularly that consider miles driven - I would be happy to discuss or learn more about your interest in this topic.

Regards,
Robert Cole

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