TOPEKA — Joe Millikan learned of a Kansas House bill imposing a new tax on electric vehicle charging stations just as he was thinking about buying a non-fossil fuel-driven automobile.
Millikan said the proposed state tax of 3 cents per kilowatt to support a Kansas highway repair fund that relies on fuel tax revenues would amount to “double taxation” because owners of all-electric cars and trucks pay a highest registration fee to Kansas Department of Revenue. That $100 tax passed by the 2019 legislature was designed to compensate EV owners by avoiding the 24-cent-per-gallon fuel tax that goes to highway repairs and construction. The registration fee for gasoline vehicles in Kansas is $30.
“It is disappointing to learn that the Kansas House could enact legislation hostile to EV owners and commercial EV chargers,” he told the House Transportation Committee. “It will discourage additional EV charging stations in Kansas even as the number of EVs is growing rapidly.”
Millikan said the legislation could lead small businesses to shut down charging stations and interfere with car dealerships interested in making charging stations available to EV owners. In addition, Millikan said, the House bill would signal EV owners traveling across the United States that they should take routes outside of Kansas.
Rep. Pat Proctor, a Leavenworth Republican on the transportation committee, said it was important for lawmakers to address inequalities in vehicle taxation, but he took a different approach. He said the owner of a Tesla electric car would pay about $3 to fully charge that vehicle if the proposed state fee becomes law. It currently costs about $5 in state fuel taxes to fill up its gas-powered Chevrolet Silverado truck.
“I fear we may accidentally disincentivise the use of fossil fuel vehicles based on this 3 cents,” Proctor said. “Are we accidentally punishing drivers of fossil fuel vehicles by not charging EV drivers the same?”
According to House Bill 2004, the “EV Energy Equity Road Repair Tax Act” would direct all revenue from the new kilowatt-hour tax on electricity used to recharge vehicle batteries to the state highway fund. Commercial charging station owners would be responsible for reporting to the state the taxes levied on EV owners. EV charging at residential outlets would not be subject to the proposed state fee.
Failure to comply with Kansas law would be a felony punishable by a fine of $25 per kilowatt hour of energy sold to EV consumers and a $5,000 to $50,000 fine or a sentence of no less than 30 days in a county jail.
The state Department of Revenue estimated that the House bill would result in new tax collections of $148,000 in 2024, $179,000 in 2025 and $210,000 in 2026. The figures assumed there were 10,500 electric vehicles in Kansas, an average distance driving 7,000 miles a year, consumer use of public charging stations for 20% of the electricity consumed and the consumption of one killowatt for every three kilometers travelled.
In addition, the Revenue Department estimated it would cost the state agency $640,000 to modify computer programs to manage the electric vehicle tax and hire a couple of employees to monitor the accuracy of charging stations.
Rep. Bill Rhiley, R-Wellington, said in the House committee hearing Tuesday that the Revenue Department’s fiscal analysis was flawed because it did not account for electric trucks and cars that would cross-state on Interstate 35 and on Interstate 70. Those motorists should contribute to the state highway fund for using Kansas roads, he said.
“We can’t just look at the 10,000 EVs that are in Kansas,” Rhiley said. “We need to look at the hundreds of thousands of EVs that will be crossing Kansas.”
“Smiles Per Gallon”
Rep. Nick Hoheisel, R-Wichita, said lawmakers should consider raising EV owner registration taxes to bring equity to drivers’ contributions to the state’s highway fund. He said the bottom line of any bill should be fairness to owners of gas and electric vehicles.
Vehicle purchases were the result of consumer choices and individuals should be held accountable for their decisions, said Representative Michael Houser, R-Columbus.
“It’s no secret that I have this big truck. I guarantee you I pay my fair share of excise taxes on fuel,” Houser said. “I didn’t buy mine for miles per gallon. I bought mine for smiles per gallon. I get my money’s worth.
Wendi Stark, representative of the League of Kansas Municipalities, said Rhiley’s bill was flawed because it directed all new revenue from electric vehicle charging stations to the state highway fund instead of dividing the revenue with cities and counties for works on road projects. Under current Kansas law, the state withholds 66.3% of fuel tax revenues, and cities and counties receive 33.6% of that revenue.
The bill emerged in the House at the same time the Kansas Department of Transportation was engaged in a three-year study of alternative revenue sources in response to a drop in fuel tax revenues, said Joel Skelley, policy director at KDOT extension. This study focused on the application of a ‘road use charge’ rather than links to energy source taxation.
“This treats roads as the utility being used instead of the fuel source the vehicle operates on. Taxing fuel to pay for road use creates an ongoing challenge given emerging vehicle technologies. Every new engine technology, or fuel source, will require new complicated ‘energy equivalence’ calculations to travel a certain distance,” he said.
He said the House bill would disproportionately target EV drivers who rely on public or shared charging stations in apartment complexes, workplaces and elsewhere. The proposed tax would not apply to people recharging vehicles at their private home, she said.
Zack Pistora of the Kansas Sierra Club told House members that consideration of electric vehicle legislation on fees and taxes should include debate on the influence of traditional combustion vehicles on road safety, air pollution, congestion, noise and road damage.
National studies have indicated that heavy trucks are responsible for a disproportionate amount of road damage compared to light vehicles and that tax and tariff systems should take this into account, he said.
“Their data concludes that the roadside damage from an 80,000-pound truck would be the equivalent impact of 9,600 ordinary automobiles,” Pistora said.