Transportation Bill would assess fee for ‘alternative fuel’ vehicles

Posted by Dan Whisenhunt March 6, 2015
2011 Nissan Leaf. Source: Wikimedia Commons

2011 Nissan Leaf. Source: Wikimedia Commons

The state House has announced the passage of the Transportation Funding Act of 2015, a bill that ends a tax credit for low-emission vehicles and charges a service fee to cars that use fuel other than gasoline.

The legislation, approved on March 5, will now be considered by the Senate.

According to a release from the House Communications office, if the proposed law is enacted …

– Alternative fueled vehicles will pay a user fee of $200 for non-commercial and $300 for commercial vehicles each year.  This fee will be adjusted annually based on the National Highway Construction Cost Index. The bill defines “Alternative Fuel” as electricity, natural gas, and propane and “Alternative Fueled Vehicle” as any vehicle fueled solely by alternative fuel.

– The tax credit for low emission or zero emission vehicles is made $0.00 for vehicles purchased or leased after July 1, 2015.

Currently the state offers a credit of either 20 percent of the vehicle cost or $5,000 (whichever is less) on zero emission vehicles. Thanks to the tax credit, Georgia became the “second-largest market” for electric vehicle sales in the country.

The law also changes the state’s fuel tax to an excise tax.

“This excise tax will be set at 29.2 cents per gallon, which approximates the sales tax rate which has been imposed on gasoline using a weighted average of the price of gasoline over the previous four years ($3.39 per gallon total price at pump),” the release says. “This excise tax will be adjusted annually based on Corporate Average Fuel Economy (CAFÉ) standards and the National Highway Construction Cost Index. The bill removes all state sales and use tax from the sale of motor fuels and thus repeals the second motor fuel tax.”

The state fuel tax is 7.5 cents per gallon and hasn’t changed since 1971.

Here is the full list of the proposed changes to transportation funding, according to the release from the House Communications Office.

– The act will convert the sales tax on motor fuel to an excise tax.  This excise tax will be set at 29.2 cents per gallon, which approximates the sales tax rate which has been imposed on gasoline using a weighted average of the price of gasoline over the previous four years ($3.39 per gallon total price at pump).  This excise tax will be adjusted annually based on Corporate Average Fuel Economy (CAFÉ) standards and the National Highway Construction Cost Index.

– The bill removes all state sales and use tax from the sale of motor fuels and thus repeals the second motor fuel tax.

– The bill defines ‘transportation purposes’ as roads, bridges, public transit, rails, airports, buses, seaports, and all accompanying infrastructure and services necessary to provide access to these transportation facilities, including general obligation debt, revenue debt, and other multiyear obligations issued to finance such purposes.

– The bill defines ‘education transportation purposes’ as transportation necessary to move students to and from educational facilities in this state and all accompanying infrastructure and support necessary to provide safe and efficient access to and from these educational facilities.

– SPLOSTS will continue at 1 percent on all motor fuel sales; upon renewal, revenues generated from motor fuels will be required to be used on transportation purposes. HOST and LOST will no longer be levied on motor fuels, but the rate on all other sales will go to 1.25 % beginning July 1, 2016. The MOST will run to its expiration, and if reauthorized by voters, will no longer be levied on motor fuels and the rate will go to 1.25  percent.

– The tax credit given to commercial airlines is repealed and a provision requiring the revenue derived from the sales and use taxes on jet fuel to be used for a state aviation program or airport related purposes to the extent required by Federal law. Anything in excess of the federally required amount may be appropriated by the General Assembly for other purposes.

– Alternative fueled vehicles will pay a user fee of $200 for non-commercial and $300 for commercial vehicles each year.  This fee will be adjusted annually based on the National Highway Construction Cost Index. The bill defines “Alternative Fuel” as electricity, natural gas, and propane and “Alternative Fueled Vehicle” as any vehicle fueled solely by alternative fuel.

– The tax credit for low emission or zero emission vehicles is made $0.00 for vehicles purchased or leased after July 1, 2015.

– The Georgia Transportation Infrastructure Bank may give preference to eligible projects in tier 1 and tier 2 counties. When determining eligibility, the board shall make every effort to balance any loans or other financial assistance among all regions of this state. Additionally, Preference for grants and other financial assistance may be given to eligible projects which have local financial support.

About Dan Whisenhunt

Dan Whisenhunt is editor and publisher of Decaturish.com. https://www.linkedin.com/in/danwhisenhunt

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  • Jay

    I have an electric vehicle, so I don’t currently pay gas taxes. However, I only drove it 1,348 miles in 2014. A flat $200 tax equates to 684 gallons of gas at the tax rate of 29.2 cents per gallon. With 684 gallons, I could have driven an internal combustion vehicle 17 thousand miles!

    I realize that they are basing this on average numbers for miles driven per year…but I expect that most electric vehicle drivers (other than perhaps those who own a Tesla) use them because they have a short commute that works will with the limited range an EV offers, so the $200 a year fee feels like we are paying for more than our fair share of road usage. Perhaps a millage based system based upon an odometer reading every time the tags are renewed would be more fair?

  • Samb

    I wish they’d keep some rebate on the purchased vehicles, as I believe that incentivizing responsible behavior is a valid driver of tax policy. However, the rebate for leasing is way out of whack. $5000 comes to almost two-thirds the cost of a two-year lease. Despite the fact that I just bought a (gas-powered) car last year, I considered leasing a Leaf as well — to save on local commutes, yes, but mainly to have a car in the driveway while I was gone on trips (I live alone). That it’s rational to lease a car for the purposes of home security shows that the incentive is warped.

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