Last week, Texas’ Governor Greg Abbott signed Senate Bill 505 into law and starting September 1st, owners of electric vehicles will have to pay around $600 to register it. This is in stark contrast to the registration fee for gasoline-powered vehicles, which costs only $50.75. The new law has been met with criticism from EV owners and advocates who argue that it unfairly punishes those who are attempting to reduce their environmental footprint by driving a more sustainable vehicle. In this article, we’ll take a closer look at Senate Bill 505 and its implications for EV owners in Texas as well as other states that have similar laws.
Overview of SB 505
SB 505 was proposed by Senator Kelly Hancock and passed with bipartisan support in the Texas legislature. It imposes an annual registration fee of $90 for electric vehicles, which is $37.75 higher than the state’s standard registration fee for gas-powered cars. In addition, SB 505 also requires EV owners to pay a one-time “electric vehicle registration fee” of up to $515, which goes towards funding road construction and maintenance projects.
In Texas, the current tax rate for gasoline is 20 cents per gallon, with 18.4 cents of that going to the state and 1.6 cents going to local government entities. These funds are used for a variety of purposes, such as road infrastructure and maintenance projects, public transportation initiatives, and other transportation-related programs. In addition, the state also collects a 6.25% sales tax on gasoline purchases, which goes toward its General Revenue Fund.
Fearing a sizeable drop in revenue for the state, Texas lawmakers proposed SB 505 in an effort to make up for the potential loss of revenue due to increasing electric vehicle sales.
Implications for EV Owners in Texas
The most obvious implication of SB 505 is that electric vehicle owners will now be paying higher fees than those who drive gas-powered vehicles. This could discourage some people from buying EVs, as they will now be paying significantly more in registration fees than their gas-powered counterparts. Additionally, the one-time “electric vehicle registration fee” may also make it more difficult for some people to afford buying an EV in the first place.
Spread of Similar Laws Across other States
Unfortunately, SB 505 is not an isolated incident and similar laws are cropping up in other states. Although some of these laws may be intended to encourage greater use of electric vehicles by incentivizing their purchase, they could ultimately end up having the opposite effect due to the increased cost of registration.
- Georgia has recently passed a law that requires EV owners to pay an annual fee of $200 in addition to the state’s standard registration fee for gas-powered vehicles.
- Colorado recently passed a law requiring EV owners to pay an additional $50 on top of the standard registration fee.
- Oregon has also imposed electric vehicle registration fees, but these fees are more modest than those in Texas.
- Nevada passed a law imposing an annual fee of $100 for EV registration.
- Idaho has a law that requires EV owners to pay an additional $75 on top of the standard registration fee.
Overall, the passage of SB 505 in Texas has sparked a debate about the fairness of imposing higher fees on electric vehicle owners. While some argue that this could be a way to offset the costs associated with maintaining roads and highways, others have raised concerns that it could discourage people from buying EVs in the first place.