Taxes could toss sand in gears of governor’s drive to make Georgia the electric vehicle capital

Caption

An electric vehicle charges up at a Georgia Power station located in the parking lot of a Burger King in Columbus.

Credit: Jill Nolin / Georgia Recorder

If Georgia lawmakers want to help Gov. Brian Kemp achieve his goal to make the state the electric vehicle capital of the nation, they have an odd way of showing it.

Georgia bills that would drastically shift how much electric vehicle owners pay to recharge their cars is expected to receive a final vote before this year’s legislative session wraps up on Wednesday.

The statewide convenience store association, environmental nonprofits and many drivers of battery-powered cars are among those supporting charging electric vehicle drivers to recharge their vehicles in the same manner that drivers of gasoline and diesel-powered vehicles pay to refuel at the pump. Legislation in the state House and Senate would convert the cost of charging for electric cars to a calculation based on the kilowatt hour instead of how long it takes to refill the battery.

Still, electric car and truck owners are concerned that a similar motor fuel levy would be a double tax on top of the yearly $214 registration fee for small battery-powered cars and the $320 paid by owners of commercial electric vehicles. Both fees are among the highest electric vehicle levies in the country, approved by state lawmakers in recent years to replace lost motor fuel tax used to repair roads and bridges.

Both chambers are scheduled to vote on House Bill 406 and Senate Bill 146 this week, culminating a months-long joint legislative study committee process on the booming electric transportation industry.

In both the House and Senate bills, the state Department of Agriculture will assume oversight authority over electric vehicle charging stations, just as it does for fuel pumps in convenience stores.

Georgia now charges a tax of about 30 cents per gallon for gasoline and 35 cents for diesel.

“Let’s say you go to Buc-ee’s or RaceTrac or whatever on your way to Savannah this weekend and you pull in and charge at a public charging station; you would be charged the equivalence of a motor fuel tax that is based on the rate set by the Department of Revenue,” said Senate Majority Leader Steve Gooch at Wednesday’s House Rules Committee meeting.

However, advocates for a transition to electric vehicles are concerned that the proposals don’t eliminate the annual fee that electric car owners and truck drivers pay. 

Those yearly fees will remain in place while Georgia participates in a multi-state pilot project testing the feasibility of replacing them with mileage-based fees.

Georgia Conservation Voters policy manager Doug Teper, a former state lawmaker from Atlanta, said he supports Kemp’s push to make Georgia electric mobility capital of America.

“I want to make sure we don’t kill the baby in the crib by putting too many taxes on the motor fuel in the transition to electricity,” Teper said at a March 20 meeting before the Senate Committee Regulated Industries and Utilities. “I know we need to maintain our roads and bridges. I am concerned that we don’t want to be known as the state that taxes the most.”

Georgia’s Department of Economic Development estimates that globally there will be 56 million electric passenger vehicle sales in 2040. Advocacy group Environment Georgia predicts that electric vehicles could rise from 1% to 10% of the Georgia market by 2030.

Across Georgia, the electric mobility industry is estimated to be responsible for 35 projects worth $23 billion dollars in investment and 28,000 new jobs.

If the pending legislation becomes law, Georgia will become the fifth state to implement a kilowatt-hour fee. Lawmakers’ proposed rates of 3.47 cents per kilowatt hour would be the highest so far, and EV owners already pay the second highest annual fee.

Mark Woodall, conservation chair of Sierra Club Georgia, said waiting until the state DOT’s pilot program is completed would be better. He also encouraged state lawmakers to keep an eye on technology advancements that under the state’s current plans could make emerging charging networks less cost-effective.

The EV legislation is in anticipation of $135 million in federal funding coming to the state for electric charging stations off interstate exits to reduce “range anxiety” experienced by EV owners driving long distances between charging stations in rural areas.

The electric vehicle legislation would take effect on Jan. 1, 2025, giving state departments of agriculture and revenue ample time to draft regulations and begin permitting.

Electric vehicle owners have pushed for a conversion that is equal to the current gas tax for a long time, and Gooch says a Georgia Department of Transportation project could recommend a way to replace the annual license plate tag renewal fee EV owners now pay.

Everyone who uses a public road should pay their fair share to maintain roads and bridges, Gooch said.

Since most EVs are used daily to travel short distances, the legislation doesn’t charge extra taxes when cars and trucks are charged at home, which accounts for the bulk of owners now.

“The $200 annual fee basically covers your usage of the public roads around town where you live, to and from work, short trips, going to the grocery store,” said the Dahlonega Republican. “But let’s say if you leave Dahlonega this afternoon and drive into Savannah, you’re gonna have to stop at least once, if not twice to refuel your electric battery.

“My position has been if you only use your electric car occasionally to go from your home to the bank or to school and back you’re not going to use that car enough to justify the $200 perhaps,” Gooch said. “But if you drive your car like I’m driving my pickup truck 30,000 miles per year, I paid over $1,000 last year in gas tax and I would be better off with the $200 fee.”

This story comes to GPB through a reporting partnership with Georgia Recorder.