ROAD MAINTENANCE SYSTEM.
Utah’s gasoline taxes help fund the maintenance and construction of roads throughout the state. It works as a fair user fee, meaning those who use the roads more end up paying more for their maintenance.
A tax at the pump, however, does not collect funds from electric vehicles. And as we see more EVs in Utah, the state will need to capture taxes from EV owners to help maintain our highways.
To solve this issue, Utah lawmakers, environmental groups, and other leaders negotiated a compromise solution in the form of HB 186, or the Road Usage Charge (RUC) program, in 2022. The bill created a new road usage fee structure for electric vehicles to ensure that everyone pays their share. This structure struck e a delicate balance that doesn’t discourage drivers from purchasing EVs and hybrids but provides a stable funding structure for road usage.
In addition to the universal annual vehicle registration fee, EVs will pay an additional flat charge of :
- $120 starting in 2023, as the market continues to grow
- $180 by 2026 or 3% adoption of EVs throughout Utah’s entire fleet of registered vehicles
- $240 for 2032 or 10% adoption of EVs throughout Utah’s entire fleet of registered vehicles
Drivers can pay less than this if they submit road usage charge (RUC) data to the state showing they have driven relatively few miles.
- The math of the tiered structure rates for RUC is
- 2023 half a cent a mile before you hit $120 max
- 2026 or 3% adoption one cent a mile before you hit $180 max
- 2032 or 10% adoption 1.5 cents a mile before you hit $240 max
- The math on this breaks down to
- 2023 tier: 24,000 miles before hitting the base registration fee of $120
- 2026 tier: 18,000 miles before hitting the base registration fee of $180
- 2032 tier: 16,000 miles before hitting the base registration fee of $240
The Utah Transportation fund is maintained to account for revenues and expenditures associated with highway construction and maintenance. Principal funding is provided from dedicated highway user taxes, fees, and federal funds. Learn more.
WHY A NEW TAX?
Utah has thousands, if not millions, of out-of-state drivers passing through our state each year. Gas taxes at the pump collect most out-of-state drivers’ share of road usage funding, but lawmakers argue that our state is missing out on taxes from out-of-state electric vehicle owners who use our roads and contribute to their need for maintenance.
To compensate for the loss, a Utah Lawmaker is proposing to implement a new tax of 12.5% on most electric charging stations throughout the state.
TRIPLE-TAXING UTAH EV OWNERS.
While we understand the need to capture taxes from out-of-state drivers to maintain our highways, the current bill language would implement this new tax on most charging stations —including those primarily used by Utah residents.
For example, this tax would adversely impact local EV users who do not have charging infrastructure readily available at their homes (i.e., residents living in apartments).
Without amendments or changes to this bill, many Utah residents who are electric vehicle owners would be triple, taxed.
Data from the Alternative Fuels Data Center (AFDC) shows that in 2020 there were 11,230 EVs(1.1% of total U.S EVs) registered in Utah, and that number increased by 46.75% in 2021, up to 16,480 (1.13% of total U.S EVs)
TAKE ACTION- CLOSED
This action alert has now been closed. House Bill 301 unfortunately passed, and our team is looking at strategies to prevent further barriers towards electric vehicles.