The state of Iowa is set to begin collecting taxes for charging electric vehicles starting this July, according to a report by Route Fifty.
While the number of EVs on Iowa roads still constitutes a small portion of the 4 million registered vehicles in the state, it’s a growing trend.
To accommodate this shift and make up for the loss of gas tax revenue, the state transportation agency proposed three recommendations to the legislature in 2018: an excise tax per kilowatt hour for non-residential charging, registration fees for electric passenger vehicles, and a hydrogen fuel excise tax.
These recommendations were enacted into law the following year, with the goal of making sure electric vehicle owners pay their fair share for road and bridge upkeep.
The increased registration fee aims to cover most of the lost fuel taxes, while the kilowatt-hour charge would ensure out-of-state electric vehicle drivers also contribute.
Policymakers are particularly concerned about the revenue impact of electric trucks, which are expected to become a bigger factor in coming years.
The Iowa Department of Revenue is still figuring out how to handle home charging for those in apartment buildings which must use public chargers.
The state is not considering state-by-state mileage taxes, as officials believe it should be a national study with a national solution.
The electric vehicle trend has a significant impact on the RV industry as well, with more and more electric RVs hitting the road.
The new charging tax will affect owners of electric RVs and is expected to bring in revenue to the state while also ensuring those who use the roads pay their fair share.
With the popularity of electric RVs on the rise, it will be interesting to see how the new tax affects their adoption in Iowa.