Vermont Lawmakers Considers Mileage-Based Tax Credits on Electric Vehicles

Vermont lawmakers are preparing for mileage-based EV tax credits by proposing a bill to make up for lost revenue. H.479 Bill, which is an act relating to the Transportation Program, was passed in the House on March 30th.

Mileage-Based EV Tax Credits

To keep up with its environmental efforts and raise funds for roads and infrastructure, Vermont state legislators are now taking into consideration the proposed H.479. Electrek reported that this is a mileage-based tax for electric vehicle owners to be able to regain lost revenue.

Agency of Transportation Tax Sustainability and Innovations Project Manager Patrick Murphy stated that the tax will be based on the number of miles driven by the EVs, rather than the amount o gasoline used for its counterpart, which is about $150 a year.

H.479 was passed in the House on March 30th, which was read in the Senate for the time and led to the Committee on Transporation. As per the proposed bill, lawmakers aim to launch a mileage-based EV tax by July 1, 2025. This will be the time when the state targets 15% of all new vehicles to be fully electric or plugged-in hybrids.

Lawmakers added that through this bill, there will be a possible framework where the Department of Motor Vehicles could calculate the number of drivers that owe through odometer readings, collected during annual inspections for vehicles.

Aside from this, owners of charging hybrid vehicles are planning to pay a higher registration fee (but not a mileage-based fee) in order to make up for gas taxes drivers who are not paying, given that the state could not come up with a way to monitor how many miles a hybrid car drives on gas over its batteries.

Murphy acknowledged that the mileage-based EV tax is not a perfect system, with some drivers may come to think of it as unfair to pay Vermont for miles they drive on other states' roads. But he clarified that the fee would not cover EV drivers from other states who drive in Vermont and those whole fueled up at a gas station in the state.

Vermont as Pro-EV State

By being known as a pro-electric vehicle state, VTDigger reported that Vermont has been actively pushing its efforts to provide more environmentally-friendly transportation options through its Drive Electric Vermont. These efforts include EV chargers installation and approving its first Tesla center in December.

But through these efforts, Vermont will miss out on approximately $1 million in revenue for this year due to the rising inflation and uptake of electric vehicles and hybrids, given that gas tax helps fund maintenance and improvements for the road.

The Transporation Bill for this year aims to expand the number of households eligible to purchase an electric vehicle with incentives. Murphy added that this will help increase the rate of EV adoption, and the state is really confident about its 2025 goal.